Toyota and Lexus dealers are banking on pent-up demand and better new vehicle availability to support an improvement in new-vehicle sales in 2023, despite higher interest rates and other worries about the U.S. economy.
“At least for us, the demand is still there,” Dealer Steve Gates, 2023 chairman of the Toyota National Dealer Council, tells Wards.
In a separate briefing to announce 2022 results, Toyota Motor North America executives offer similar sentiments about the U.S. market in general, while avoiding a precise forecast for U.S. Toyota and Lexus sales in 2023.
Jack Hollis (pictured, left), Toyota’s executive vice president of sales, predicts U.S. light-vehicle sales of around 15 million in 2023. “The 2023 uptick is not as high as we would love it to be, but an uptick,” he says.
U.S. light-vehicle sales for 2022 are around 13.7 million, down 8.2% vs. 2021, according to the National Automobile Dealers Assn.
“Demand is still greater than our supply,” Hollis says. “What’s different now is more stability,” meaning a “slow but steady” increase in inventory. “That alone gets us close to the 15 million mark this year,” for the whole industry, he adds.
Toyota Motor North America reports 2022 U.S. light-vehicle sales of 2,108,458 for Toyota and Lexus combined, down 9.6% vs. 2021, even though its December sales are up 3.5%, primarily due to better availability. The Toyota brand delivered 1,849,754 units, led by RAV4 with 399,941 sales, while Lexus models chipped in 258,704 deliveries with the RX topping its chart with 96,041 sales, Wards Intelligence data shows.
Gates says that since the pandemic, his Toyota and Lexus inventory has been zero or close to it at the end of most months. “It’s become sort of a point of pride,” he says.
Gates owns Gates Auto Family, Richmond, Ky. The group has 11 new-car stores in Kentucky, Tennessee and Indiana, including three Toyota dealerships and a Lexus store, plus Audi, Chevrolet-Buick-GMC, Ford-Lincoln, Honda, Hyundai, Kia and Nissan dealerships.
He says Toyota South, a dealership in Richmond, Ky., finished 2022 with just seven new vehicles in stock — and all but “a couple” of those were pre-sold. Before the pandemic, that would probably have been at least 100 vehicles, with much fewer pre-sold, he says.
“We have enough orders, probably, we could operate for half a year, just taking care of the ordered vehicles we already have,” he says.