Lexus LS460 SZ sports sedan ??
07-10-09, 12:43 PM
#16
No, you got it wrong or misunderstood what I am saying.
Car prices (MSRP) in the U.S. stay roughly the same throughout a model's life time, it will not increase dramatically even if the USD falls dramatically since the car market in the U.S. cannot take the big fluctuations. If they increase prices of cars as dramatically as falling currency valuations, it will kill their market here.
Many exporters/importers use currency hedging instruments to protect themselves from wild currency fluctuations instead.
When the USD is weak, prices of the same model in Japan will appear higher in USD.
Say the LS debut at $65k base price in the U.S. 3 years ago when the USD was high, the price will stay at roughly $65k today even when the USD is much lower today, but the equivalent Japanese model will look much more expensive now because of the weak USD.
The $94435 price quoted above is only meaningful relative to the prices of the other LS model variations in Japan, it does not mean they can/will charge the same when they bring the LS SV model to the U.S.
When the USD falls, all the LS models in Japan will suddenly look more expensive relative to the same model in the U.S. too compared to the times when the USD was stronger.
Car prices (MSRP) in the U.S. stay roughly the same throughout a model's life time, it will not increase dramatically even if the USD falls dramatically since the car market in the U.S. cannot take the big fluctuations. If they increase prices of cars as dramatically as falling currency valuations, it will kill their market here.
Many exporters/importers use currency hedging instruments to protect themselves from wild currency fluctuations instead.
When the USD is weak, prices of the same model in Japan will appear higher in USD.
Say the LS debut at $65k base price in the U.S. 3 years ago when the USD was high, the price will stay at roughly $65k today even when the USD is much lower today, but the equivalent Japanese model will look much more expensive now because of the weak USD.
The $94435 price quoted above is only meaningful relative to the prices of the other LS model variations in Japan, it does not mean they can/will charge the same when they bring the LS SV model to the U.S.
When the USD falls, all the LS models in Japan will suddenly look more expensive relative to the same model in the U.S. too compared to the times when the USD was stronger.
What I said is true, in the sense that as the US Dollar weakens, prices for imported products become more expensive. The decision of car manufacturers to hold prices constant makes sense from a desire to avoid disruption of this market.
However, the fact is that margins are squeezed for the manufacturers absent some sort of hedging strategy. And, these hedging strategies are certainly not perfectly correlated to account for extreme swings in currency exchange rates and also cannot provide protection indefinitely.
Funny thing is, the US Dollar has actually shown a little strength vs major world currencies recently.
07-10-09, 03:19 PM
#18
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peteybabes
LS - 4th Gen (2007-2017)
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08-29-14 11:29 AM
