Toyota Lowers Camry Hybrid Price

By Brendan Moore

07.20.2007

Toyota announced today that it is lowering the base price of the Camry Hybrid by $1000 USD (3.8% of MSRP) to $25,860.

Hewing to the old adage about there being no free lunch in life, Toyota is also de-contenting the Camry in the following ways in order get to that price reduction: The 2007 model had as standard; alloy wheels, JBL audio system, leather steering wheel and shift knob, and electrochromic mirror with compass and Homelink functionality. For the 2008 Camry Hybrid model, the standard equipment is knocked back to steel wheels, single-disc CD player with only four speakers, plastic shift knob and steering wheel, and manual day/night mirror.

And in yet another pricing move to make sure all of this is a wash from a revenue standpoint, Toyota has raised the price on the regular Camry $100. Even though the price increase on the regular Camry is only 1/10 the price decrease on the Camry Hybrid, Toyota sells far, far more regular Camrys than Camry Hybrids, so they’re covered. Between the de-contenting and price increase on the regular Camry, Toyota has ensured that the Camry line will not suffer any decrease in gross revenue – if you’re a Toyota stockholder, no need for worry.

Toyota is endeavoring to take some of the sting out of the diminishing tax credits available to buyers of Toyota hybrids. Toyota surpassed their 60,000 vehicle limit for the tax credits in 2006. The tax credits were offered by the federal government to all buyers of hybrid vehicles from any manufacturer in order to stimulate sales, but each manufacturer has a cap of total hybrid vehicle sales at which buyers can receive full tax credit. The Camry Hybrid tax credit, which started out as high as $2,600, is now a much-smaller $650; and by Oct. 1, 2007, the car won’t qualify for any percentage of the income tax credit, according to the U.S. Internal Revenue Service.

Vehicles purchased from the other hybrid manufacturers are still eligible for large tax credit amounts, some as high as $3000 (i.e. Ford Escape Hybrid).

Toyota Motor Co. is the largest seller of gasoline/electric hybrids in the world.

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Author: Brendan Moore

Brendan Moore is a Principal Consultant with Cedar Point Consulting , a management consulting practice based in the Washington, DC area. He also manages Autosavant Consulting, a separate practice within Cedar Point Consulting. where he advises businesses connected to the auto industry. Cedar Point Consulting can be found at http://www.cedarpointconsulting.com.

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3 Comments

  1. Smart way for them to potentially increase volume – OR increase profits by charging more to add the deleted features back onto the hybrid model.

    If I was buying a new $25k car, I wouldn’t touch one with plastic hubcaps and a non-leather steering wheel and shift knob with a 10 foot pole, though.

  2. The Toyota Camry is worth it, even if you now have to pay extra for those options. I own one, I know, it’s a great car. And I’m using less gasoline than I was before in my 99 Camry, so that’s always a positive thing.

  3. It’s not really a price cut when the standard content is also cut. I haven’t put the 2008 Camry into TrueDelta’s pricing database yet, but when I do I suspect that when adjusted for features the new price will be about $100 more than the old one, in line with the non-hybrid 2008 Camrys.

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