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Japanese cars will get more expensive next year

18 December 2008 10:33 (UTC +04:00)

Baku. Nijat Mustafayev â€“ APA-Economics. Huge exchange rate depreciation and booming Japanese Yen which appreciated by 35 percent during five months of the current financial year 2008-09 falling heavily on import based industries especially the automobile sector due to rise of price and drastic cut in sales which dropped at least by 54 percent during the fiscal.
Make-wise prices of various cars indicate that prices of Cuore of Indus Motors have increased by 21-27%, Suzuki cars by 12-16% since July and Corolla by 6% since the new model was launched (excl. 5% FED and 1% higher Sales tax). Demand from the middle income segment continues to be hit by expensive auto financing and stringent credit criteria by the banks.
However, the automakers have few other options as they are struggling to retain profitability as the Japanese Yen has appreciated by 35% during the period. Although almost 50% drop in steel prices from their peak is a positive development yet higher foreign exchange volatility (Yen +35% since July) overshadowed positive impact by depriving the customers of the benefits due to high exchange rate depreciation.