Don’t expect much let-up in the current new-vehicle inventory shortage until well into 2022, due to high customer demand, the ongoing computer-chip shortage and the wild card of COVID-19 variants, according to Toyota executives.
First and foremost is the unbelievable level of demand, Bob Carter, executive vice president of sales for Toyota Motor North America, says during a July 28 online briefing.
“Americans are buying cars, trucks, SUVs, quite frankly, at a rate I have never seen before,” he says. “Business is as good as we’ve ever seen it.”
In June, Toyota Div. sales were 207,331, up 39.8% vs. the year-ago month. For the first half, sales were up 44.5% to about 1.3 million. Lexus Div. sales were 26,708 in June, up 29.1%. Sales for the luxury division were up 47.7% in the first half, to 157,713, the company says.
Despite the hot sales pace, Carter (pictured, below left) says Toyota dealers will finish the month of July with a lot more inventory than they had at the beginning of the month. The 1,240 Toyota dealers in the U.S. had only about 38,000 cars and trucks in stock in early July, about a 7-days’ supply, Carter says. He expects to finish the month with about 180,000 vehicles in stock.
Toyota Motor Sales USA outsold General Motors for the first time in the second quarter – just barely, by about 5,000 units, out of a total of 688,813 for Toyota Motor Sales, according to Wards Intelligence. In answer to a question, Carter says it’s not “sustainable” that Toyota could continue to outsell GM in the U.S.
He attributes the second-quarter win to Toyota’s behind-the-scenes procurement and R&D teams, which came up with ways to work around the current scarcity of computer chips and COVID-related bottlenecks in supply chains.
“The demand is there, for the entire industry,” Carter says. “But the ones that can migrate the supply chain disruptions the best are producing the results.”
Carter says it’s “Economics 101” that it will take time for the auto industry as a whole to get inventories up to more-normal levels. “It will probably be into the second quarter of 2022,” he says, “before we see the industry inventory stabilize in the area where supply matches demand.”
Chris Reynolds, chief administrative officer-corporate resources for Toyota Motor North America, says COVID-19 variants could still throw new kinks into plans by both OEMs and suppliers to fully reopen plants.
“You can never let your guard down,” he says. “It’s the virus that runs the show.”