The China Post - Despite the depreciation of the yen, Japanese automakers are refusing to lower car prices and instead rolling out promotions for "special edition" vehicles.
Taiwanese buyers have been expecting the price of Japanese-made cars to go down in recent months, due to the yen's depreciation. Citing difficulty in lowering prices, Japanese carmakers have turned to promotions to attract sales.
The yen has appreciated 25 percent in the past three years, making it more difficult for Japanese car companies to conduct business overseas.
Previously, currency change costs had been going up at a faster pace than the prices of the vehicles themselves, leading many Japanese carmakers to plan to raise prices at the end of the Chinese New Year holiday promotion season. Toyota planned to raise prices by 1 percent beginning in March.
Plans changed after new Japanese Prime Minister Shinzo Abe took office and ordered policies to bring down the yen in a bid to help Japanese exporters. Toyota cancelled the initial price raise plan in February, and other Japanese car makers followed suit.
Carmaker Mazda was the only exception. It announced an average price decrease of 3 percent, hoping this would improve sales and expand market shares. The result, however, did not go as Mazda had hoped. There was no rise in sales, something attributed by one source as due to a "buy high but not low" attitude among consumers.
"The car's cost structure is not like what many people think," said Chien Gin-wu, sales manager of China Motor Corp., Mitsubishi's distribution agent in Taiwan.
Japanese manufacturers already switched to procure parts made in Europe, and rely less on expensive parts made in Japan, Chien said, adding that "even with a rapid change in exchange rates, it is impossible to adjust prices immediately."
Given that the yen has not been stable recently as well as issues concerning the New Taiwan dollar, the company will not consider price adjustments in the immediate future, Nissan Taiwan spokesman Li Zen-chen said.
Li said special promotions will be rolled out to attract sales.
In addition to the 0-percent special interest rate commonly seen in the car market, Nissan Taiwan is also offering engine cooling systems, engine fuel, intake/exhaust systems, engine control modules (ECM), gasoline engine structures, transmission systems and other high-priced parts and services, plus an eight-year unlimited mileage warranty, with car purchases. Usually the cost of such a package would exceed NT$400,000.
Other major carmakers are also introducing limited "special edition" vehicles, adding more features and accessories to their current best sellers and promoting hardware improvements and individualized designs, in an effort to extend product visibility.
