Toyota hikes prices of hybrid, commercial vehicles in Japan

Toyota is raising the prices in Japan for the Prius and Harrier hybrids as well as some commercial models  in response to the soaring cost of steel, crude oil and other raw materials - the first hike in the country without a model makeover in three decades.

This price revision follows a similar move announced by the company for its American products last month where prices of 13 models were raised by an average $181 or 0.81 per cent. However, the Japanese hike is dearer.

The new suggested retail prices, announced Monday, show an average increase of 3 per cent for the two gas-electric hybrid models, and an average 2 per cent of several commercial vehicles.

Speculation had been rife that Japan's top automaker would raise some domestic prices soon, and Toyota has acknowledged that as risky because the domestic market is already sluggish. However, with prices of input materials showing no signs of abating, the company was forced to bite the bullet.

In May Toyota agreed to pay Nippon Steel Corp., Japan's largest steelmaker, as much as 30,000 yen a metric ton more for steel, setting a benchmark for other automakers in the country.

"Recent further price increases in raw materials have been larger than Toyota's cost reduction efforts are able to offset," Toyota said in a statement.