KUALA LUMPUR: UMW Toyota will increase the prices of all its Toyota and Lexus vehicles by 4% to 16% effective January next year due to the weaker ringgit.
It said on Monday the ringgit had depreciated by 20% year-to-date against the US dollar and as a result, its operating costs had increased.
“The car manufacturer has implemented strategic moves to protect the interest of its customers in the midst of the fluctuation of ringgit, and absorbed additional cost to a certain extent over the past months,” it said.
It added that it had weighed all possible options, but had no choice but to pass on some cost to the consumers to offset rising input costs due to the strengthening of the US dollar against the Malaysian currency.
UMW Toyota Motor president Datuk Ismet Suki said: “Since the beginning of this year, the fluctuation of the ringgit has impacted our business as some of our parts and components are imported, resulting in an increase in overall cost of production.
“We have implemented cost-efficiency measures and reviewed our operations across the supply chain to mitigate the weaker ringgit.”
He added the company would have implemented necessary measures to minimise forex losses impact and address the fluctuation of ringgit had it dropped gradually but the huge fluctuation of the currency within a short period had hit its operations.
“Hence, the company will have to increase the prices of Toyota and Lexus vehicles effective January 2016. The increase is inevitable as there is no clear indication on when the Ringgit will rebound,” he explained.
Ismet also said the company had tried its best to keep the price increase as minimal as possible.
“Even with the increase of our vehicle price, we could only recover partially, not 100% from the impact we have been absorbing. If the ringgit continues to slide in the near future, we may need to review our pricing structure again,” he added.
That said, he was optimistic that the price increase would not have a big impact on sales.
The auto player is on track to meet its business targets.
“We are facing challenging times but UMW Toyota is confident we can ride out the storm. We have strong fundamentals and a proven track record. I believe customers will continue to choose us and our vehicles as we deliver quality products and services that complement their lifestyles,” Ismet said.