Toyota Motor Corp. is considering boosting domestic vehicle prices by 1 to 3 percent, mainly for its high-end cars, to respond to steep rises in the costs of steel products and other raw materials, it has been learned.

It is extremely rare for an automaker to increase prices other than when it is upgrading a vehicle line. The company is considering introducing the price rise as early as August, and if prices do go up, a ripple effect may be observed among other manufacturers.

Toyota has continued to make an effort to absorb cost increases through enhanced efficiency, reviewing the cost price of all lines of its vehicles for the first time in 15 years this year. However, a planned 300 billion yen cost reduction planned for fiscal 2008 is likely to be wiped out by increases in the cost of raw materials, and more steep rises are predicted in the future.

"Over the past three years, the cost price has risen by 60,000 to 70,000 yen per vehicle, exceeding the limit (of our ability to absorb costs)," a Toyota official commenting on the situation said.

However, the official voiced concern that increasing prices for all lines could lead to stagnation in the market. In light of such concern, the company is reportedly considering restricting price increases to high-end vehicles such as its Crown cars, as many buyers of such vehicles are wealthy-class customers and the effect of price increases is comparatively low.

It is likely that recommended retail prices would increase by up to 100,000 yen per vehicle if the company's price increases came into effect.

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