GST price cuts will be wiped out, says Toyota chief
BY BRUCE NEWTON | 21st Nov 2000
Mr Conomos forecast Toyota would increase pricing at least 4 per cent across its model range from January 1 because of the depreciation of the Australian dollar against the Yen and US dollar.
And he said Toyota's price increase would almost certainly be followed by the rest of the car industry.
"They must follow because they are bleeding from the eyes as well, it is a very significant problem," Mr Conomos said.
Toyota's January rise will follow on from a 1.5 per cent price increase in October. Many other car companies also increased their prices around that time.
"The great tragedy and the great irony of this is that if you take the October price-up and you take the January price-up, there goes the GST benefit," Mr Conomos said.
As a consequence of what is expected to be wholesale price increases, Toyota Australia is forecasting a dip in overall new vehicle sales of about 30,000 to 750,000 in 2001.
Ford Australia is more bullish, estimating 2001 sales will hold at 780,000.
Ford Australia president Geoff Polites said price rises, fuel price rises, business confidence and interest rates were all potential issues which would contain the 2001 market.
He indicated January price rises were likely for Ford too: "We have all absorbed a lot this year - how much longer?".
Toyota's increases will vary depending on the model.
Fully imported cars such as the Celica sports coupe and Echo small car were likely to rise more than 4 per cent, while the Camry and Avalon had some bulwark against currency because they are assembled locally.
"With Camry we've got a shock absorber in local content, although certainly not as high as Holden or Ford, and we've also got significant exports and we sell in US dollars," Mr Comomos said.
"So we can counterbalance Camry production costs by very significant exports. Our long-term goal is to balance off import/export currency so we can neutralise the effect.
"We don't care where the currency is as long as it stays there, what we don't like is constant fluctuation. We can't plan and we can't react, it disturbs every process. So if it was going to be 52 Yen to the dollar, well let it be 52 and we will adjust." A one-Yen depreciation against the dollar costs Toyota Australia $13 million in import costs. In the past 12 months the Australian dollar's drop has cost the company $140 million. Nevertheless, Mr Conomos is forecasting a small profit for Toyota Australia.
Mr Polites is also forecasting a small profit for Ford Australia, while embattled Mitsubishi Motors Australia is expected to record a loss of about $100 million, Mr Conomos lashed out at media reports questioning the future of Mitsubishi, declaring its closure would damage the local industry severely.
"It would not have a good effect. We want more investment, we want more exports, we are striving to get this industry up to a point where it's not at all dependent on government," he said.
"That would be a huge setback if one of the majors was to go down. And there's no suggestion it would go down, there's a suggestion that Magna might stop, there's also suggestions I've seen in the press of another model.
"So I just think it's very important the car company be given an opportunity to make a public statement when they are ready to do so. This damaging speculation has no benefit whatsoever."