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Weaker yen vs dollar responsible for Lexus higher prices (of japanese made models)?

 
Old 04-09-19, 09:05 PM
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Default Weaker yen vs dollar responsible for Lexus higher prices (of japanese made models)?

Notice around 2012 itís 70 yen or so to dollar and now itís about 110... thatís weakening by about 50%!



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Old 04-10-19, 04:56 AM
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wouldnt that mean its cheaper for the US if USD is buying more yen?
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Old 04-10-19, 05:48 AM
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I definitely see an decent increase in the price of Toyota/Lexus parts. They were already expensive to begin with, but now they are Porsche expensive. I always use the Lexus OE wear sensor as an example, $137 list. On a 2018 BMW 750i x drive, $36.83 list. Yeah, German cars are soooooo expensive to maintain lol

fact checkers: BMW pn 34356890788, Lexus 47770-50050, original equipment aka OE, not OEM, not aftermarket, what came from the factory
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Old 04-10-19, 07:19 AM
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Originally Posted by 4TehNguyen View Post
wouldnt that mean its cheaper for the US if USD is buying more yen?
You are correct... unless Toyota / Lexus pays its suppliers in some other expensive, non-Yen currency (like the Euro). But I highly doubt this.

Or it could be because raw materials (from offshore) are simply getting more expensive, which is a possibility.
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Old 04-10-19, 07:26 AM
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On my GS350s, the price actually went down.

My 2015 GS350 was $60,290 (MSRP).

My 2019 GS350, same trim and drivetrain configuration, was $60,665 (MSRP), but has several more features and options than my 15 had, like triple LED headlights, HUD, the safety suite, and the power trunk.
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Old 04-10-19, 09:30 AM
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Nah the currency fluctuation just affects the company's bottom line. The MSRP is the MSRP adjusted for inflation more than currency adjustment.
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Old 04-11-19, 06:35 AM
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Originally Posted by 4TehNguyen View Post
wouldnt that mean its cheaper for the US if USD is buying more yen?
trying to wrap my head around this...

if the yen is weaker then the same u.s. dollar price (sale) for a car yields more yen for the japanese maker. but, japan, having almost no natural resources, also has to pay more yen to import raw materials like iron ore for the steel, and petroleum for plastics, etc., thus raising the number of yen to make something... so perhaps itís not so simple?

i do know from my travels to europe that the weakening currencies there relative to the dollar has made travel their more enjoyable as the prices arenít so high in u.s. dollars.
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Old 04-11-19, 06:40 AM
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Originally Posted by bitkahuna View Post
trying to wrap my head around this...

if the yen is weaker then the same u.s. dollar price (sale) for a car yields more yen for the japanese maker. but, japan, having almost no natural resources, also has to pay more yen to import raw materials like iron ore for the steel, and petroleum for plastics, etc., thus raising the number of yen to make something... so perhaps it’s not so simple?

i do know from my travels to europe that the weakening currencies there relative to the dollar has made travel their more enjoyable as the prices aren’t so high in u.s. dollars.
Also consider that vehicles made in Japan have to be transported across the ocean (usually in container-ships), and then across the U.S. in trucks or trains to reach local dealerships for sale. That can add significantly to the price of each vehicle, which may or may not be accurately reflected in the designation charge on the official price sticker.
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Old 04-11-19, 01:50 PM
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Originally Posted by bitkahuna View Post
trying to wrap my head around this...

if the yen is weaker then the same u.s. dollar price (sale) for a car yields more yen for the japanese maker. but, japan, having almost no natural resources, also has to pay more yen to import raw materials like iron ore for the steel, and petroleum for plastics, etc., thus raising the number of yen to make something... so perhaps it’s not so simple?

i do know from my travels to europe that the weakening currencies there relative to the dollar has made travel their more enjoyable as the prices aren’t so high in u.s. dollars.
If the yen weakens, then the Japan manufacturers are better off. Prices in the US should not increase.

Last edited by LexsCTJill; 04-11-19 at 01:55 PM.
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Old 04-11-19, 02:50 PM
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Originally Posted by bitkahuna View Post
trying to wrap my head around this...

if the yen is weaker then the same u.s. dollar price (sale) for a car yields more yen for the japanese maker. but, japan, having almost no natural resources, also has to pay more yen to import raw materials like iron ore for the steel, and petroleum for plastics, etc., thus raising the number of yen to make something... so perhaps itís not so simple?

i do know from my travels to europe that the weakening currencies there relative to the dollar has made travel their more enjoyable as the prices arenít so high in u.s. dollars.
Regardless of the worth of the Yen compared to the US Dollar or Euro, the Japanese auto workers and the auto suppliers (both parts and services) are still being paid in Yen on long-term contracts. So the costs to the automaker remain constant in terms of Yen paid. And when the Yen is low, Japanese-made cars will be cheaper when exported to jurisdictions that have high-value currencies.

Only if the cost of imports into resource-poor Japan increase so much (and continue to remain high) that suppliers cannot afford to absorb the increases, despite fluctuations in the worth of the Yen, will the increased costs be passed on to the automaker.

So, if the value of the Yen drops and continues to be (very) low over an extended period of time, or the prices of imports increase due to factors beyond the control of the Japanese, will automaking costs rise.

Low worth of a currency is good for exports but bad for imports.
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Old 04-11-19, 04:27 PM
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Originally Posted by bitkahuna View Post
trying to wrap my head around this...

if the yen is weaker then the same u.s. dollar price (sale) for a car yields more yen for the japanese maker. but, japan, having almost no natural resources, also has to pay more yen to import raw materials like iron ore for the steel, and petroleum for plastics, etc., thus raising the number of yen to make something... so perhaps itís not so simple?

i do know from my travels to europe that the weakening currencies there relative to the dollar has made travel their more enjoyable as the prices arenít so high in u.s. dollars.
You are correct, but it has to be said that current yen to usd ratio is ok for them... reason they increased pricing is moving upmarket and spending more on vehicle production than before.
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Old 04-12-19, 10:42 AM
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Currency hedging with forward and derivative contracts is a common practice among exporters/importers to minimize the risks of exchange rates fluctuations ...
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Old 04-12-19, 11:02 AM
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There are also forecasts etc, that go into the planning and pricing of vehicles, especially those that are produced in Japan. Margins will get squeezed or lifted a bit as the currency floats along. They try not to have direct impacts to the pricing, as it gets difficult to chase that kind of volatility. And then each model's individual sales performance relative to supply and demand also impacts its pricing and abilities there. So yes, if there are sustained shifts in the exchange rate, it can potentially impact pricing / contenting. But it gets weighted against the overall sales plan of the car.
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Old 04-12-19, 11:25 AM
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Back in 2012ish people were blaming strong yen, now its weak yen.
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Old 04-13-19, 01:29 AM
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Originally Posted by Gojirra99 View Post
Currency hedging with forward and derivative contracts is a common practice among exporters/importers to minimize the risks of exchange rates fluctuations ...
A company as large as Toyota with exposure to many currencies definitely has a comprehensive hedging strategy.
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