Nissan Raises U.S. Prices on Maxima as Much as 1.7%

June 18, 2002 BLOOMBERG is reporting that Nissan Motor Co. raised prices for the Maxima midsize sedan by as much as 1.7 percent as the third-largest Japanese automaker tries to increase profit in the biggest auto market.

Prices for 2003 models rose $200, to $24,899, for the GXE with automatic transmission; $200, to $25,649, for the SE with manual or automatic transmission; and $450, to $27,549, for the GLE, Nissan spokesman Dean Case said. The increases took effect earlier this month.

Nissan has had similar increases for Frontier pickup trucks, Altima sedans and Sentra small cars. Combined U.S. sales of its Nissan and Infiniti brands rose 9.2 percent to 314,294 in the first five months of 2002 from the year-earlier period. Maxima sales gained 9.7 percent to 49,974.

"Those price increases will have to be given back in incentives," said Susan Jacobs, president of auto-industry forecaster Jacobs & Associates in Rutherford, N.J. "Only if these vehicles were in short supply could they get the higher price."

The Tokyo-based company made only minor modifications to the 2003 Maxima, which is imported from Japan, as it prepares to introduce a redesigned version early next year as a 2004 model, Case said. The 2004 model will be built at Nissan's main North American plant in Smyrna, Tennessee.

Nissan shares rose by as much as 4.5 percent to 891 yen in Tokyo trading on Tuesday.

Strengthening Yen

The price increases follow a 7.9 percent strengthening in the yen's value against the dollar between Feb. 8 and June 14. As the currency's value rises, some analysts say Japanese companies may have to raise prices to maintain U.S. profits.

"We don't adjust our pricing or investments based on short-term swings in the currency," said Gerry Spahn, a Tokyo-based Nissan spokesman. "Pricing is based on the performance of models in their market."

Nissan's U.S. business is based in Gardena, California. The company's American depositary receipts, which each represent two ordinary shares, fell 13 cents to $14.03 on Monday. They have gained 29 percent this year.