Toshiba to raise prices April 1, 2009

Citing the dramatic drop in the yen relative to the dollar, from 107 to 89, Toshiba announced a price increase on their copiers effective April 1.

Historically, manufacturers have hedged currency for six month periods. In August of 2008, six months back, the Yen was at approximately 110/ dollar. For the six months leading into August the Yen averaged 105 / dollar. Today, the exchange rate is 90 / dollar.

Although this announcement was from Toshiba, if the Yen remains at current exchange rate levels you can expect all Japanese manufacturers to raise prices. The price increase is a double edged sword in that it has the potential to reduce a dealerships gross margin if the primary sales strategy is on matching the current monthly payment of the end user. The price increase also has the potential to increase revenue and profit (same profit ratio on a higher average unit selling price results in more profit dollars) if the price increase can be passed onto the end user. There are a lot of strategies and tactics that will enable you to raise prices, so make certain you do some planning as you get these price increase notices.