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An auto industry analyst weighed in this week on how tariffs may impact Toyota, including the Tundra pickups and Sequoia SUVs produced at its South Side San Antonio plant.
Global vehicle manufacturers like Toyota are strategizing over how 25% tariffs on vehicles and vehicle parts imported to the U.S. will impact costs over the long term and how to adjust operations to limit those costs.
Tundras and Sequoias are both built at San Antonio's Toyota Motor Texas Manufacturing plant. Even though they are made in the U.S. with parts mostly made in the U.S., they still could be some of the Toyota vehicles to see higher sticker prices as a result of the tariff hikes.
Brian Moody, an editor and analyst at Atlanta-based Cox Automotive, said Toyota has said it will absorb the additional tariff costs initially. Then he said the automaker's higher priced vehicles may see the highest sticker increases.
He said bargain vehicle hunters are more easily spooked by price hikes, while higher end browsers not as much.
"A Toyota Corolla or any economy sedan simply cannot withstand a $3- or 4-thousand-dollar price increase — it just doesn't make sense," Moody said. "But a $90,000 full-size luxury pickup, if that costs 3 or 4 thousand dollars more, that customer might be okay with that because it's a smaller percentage of the overall price."
Toyota is also known for its high-end Lexus luxury vehicles. But Moody also said the prices on most of Toyota's lineup of vehicles will likely see some sticker increase.
"They're not likely going to raise prices only on a couple of models, though they could do that, we just don't know," he said. "What makes a little bit more sense is to spread out those price increases out gradually over multiple vehicle models."
Toyota may also benefit from its "build where we sell strategy," which limits importing completed vehicles. It's one of the main reasons it chose San Antonio and Texas to build their Tundra pickups. One out every five pickups sold in the U.S. are sold in Texas.
Cox Automotive is behind consumer-facing brands like AutoTrader.com and Kelly Blue Book.
