“…..The soaring yen is bliss for Japanese tourists who have been swarming into Korea lately, but a nightmare to its carmakers’ Korean units. Trapped in faltering profitability, Japanese makers, a locomotive of sharp growth in Korea’s import car market last year, are now ? in desperation ? going for markups. Honda Korea took the initiative Monday by raising prices of all models by 3.2 to 8.9 million won ($2,063 - $5,738), or 13.9 percent on average. Compared to last year, the won-yen rate has surged some 40 percent.
The company, which topped sales by overseas makers with 12,365 vehicles in 2008, said it was an inevitable measure because the recent increase of the value of the yen makes it impossible to maintain a minimum profit within the current price range. “Profitability seriously worsened as the yen’s exchange rate has remained high,” said Jung Ji-young, Honda Korea’s spokeswoman. The company had already increased prices slightly in January, but this was not enough to cover the deficit inflicted by the exchange rate, Jung said.
Nissan Korea is purportedly mulling over a staff reduction plan, as well as an integration of its sales and marketing organization, which is currently separated for its signature brand, Infinity, and other models. As for prices, it said Infinity models will be priced higher, while other Nissan models are likely to stay unchanged. Toyota Korea raised the price of its latest model, the new Lexus RX350, by 5.1 million won to 77.7 million won last week. It said, however, it is not planning any further hikes for other products…..”
