Toyota execs see sidelines packed with would-be new buyers, but…

Toyota’s forecast is nearly flat compared with where it was a year ago as constraints continue to hold down production rates across the industry.

“The reality is that interest rate hikes and the [probability of a recession] are real pressures that are going to limit demand,” Hollis said. But with the average vehicle on the road now over 12 years old, demand won’t go away. “It will just lengthen out. It will take longer to meet that demand.”

The Toyota brand finished the year with fewer than 20,000 vehicles on dealer lots, while Lexus had about 5,500, Hollis said. That’s better than where it was months ago but still well below normal.

Hollis said Toyota sees incentives — which TrueCar says are down over 71 percent industrywide from a year ago — moderating, which should help affordability at least somewhat. But until the supply chain is more stable, inventories and sales volumes will remain down.

“I don’t think any manufacturer is at the level of volume that they want to be at,” said Andrew Gilleland, senior vice president of automotive operations at Toyota Motor North America. “It’s going to be really interesting to see how quickly many brands can recover. There are still a lot of challenges out there, not just for us, but a lot of brands are continuing to struggle””with microchip supplies.

Gilleland said when industry production levels return closer to their historic norms, at least some of the inflationary pressures that have pushed up transaction prices should ease. However, if consumers can once again find the occasional bargain, that will draw more pent-up demand back into the new-vehicle market.

” There is zero doubt in my mind that we have pent-up demand, and if we had the ability to produce at capacity, we would have a 17 million SAAR,” Gilleland said, referring to the seasonally adjusted annual rate. “We feel like there’s a lot of demand out there that we need to capture, but it’s going to be a matter of getting supply chain squared away and producing to our capacity globally.”

Source link

Leave a Comment

Your email address will not be published. Required fields are marked *

Shopping Cart