Quote:
Originally Posted by JFC
Now if the $$ goes up, say around 1.12 or 78yen all of a sudden these cars are cheaper to buy/import but yet we the customer still pay the same which = bigger $$ for Toyota Aus, but it works the other way too, if the Aus $$ drops its ass then the cars cost more to import.
There would be a general average conversion figure they use and Toyota would have to allow for the ups and downs, meaning to cover their arses we usually pay more then we need too.
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not quite. All companies that buy foreign goods at such high quantity will hedge the currency to reduce/eliminate currency movements lost. as the article posted above indicated, it's not unusual that manufacturers hedge the currency months in advance.
the price of the cars are set with the exchange rate hedged. while AUD gain against whatever currancy that they need to make the payments in, they still need to pay whatever the exchange rate hedged. therefore until they hedge the next batch of foreign currency, they still need to pay whatever amount that was hedged in the last batch. so they aren't really ripping customers off and not passing on the AUD gain becos they don't have any gain until the next time they hedge.
while i'm fine with the above practice, i am not happy with those companies that take advantage and put price up immediately when AUD goes down.