Nikkei conducted a survey of several Toyota dealerships regarding the sales situation of 20 popular car models. Since mid-November, orders for the Alphard minivan have not been accepted. Toyota has also stopped accepting orders for the Land Cruiser 300 due to concerns about production not meeting the existing order volume.
For the Alphard, the timing of order restrictions varies depending on the dealership, but they began tightening from around early July, despite the latest version being available from late June. However, some SUV models like the Harrier and Corolla Cross have not been affected by the tightened ordering situation.
Restricting orders has had a significant impact on Toyota’s sales. Sales have particularly declined in August within the months of April to October.
According to Nikkei, there are three possible reasons explaining Toyota’s current situation.
Firstly, demand is outstripping the company’s manufacturing capacity. Toyota has increased its domestic production forecast for Toyota and Lexus vehicles in the fiscal year 2023 by an additional 90,000 units to reach 3.34 million units, higher than the 3.3 million units previously estimated before the pandemic occurred.
Secondly, Toyota has a large backlog of orders. Within Toyota’s system, cars are produced based on orders to minimize inventory and excess production. When production decreased due to chip shortages during the Covid-19 outbreak, the company still accepted orders. At peak times, the order backlog reached approximately 1 million vehicles.
A change Toyota implemented in 2020 integrating sales channels may also be a factor. Toyota dealerships used to be divided into four types, with certain models only sold at specific dealerships. However, now any Toyota model can be purchased at any dealership. A dealership executive mentioned this has led to the situation of “orders piling up for certain models” and cancellation rates have also increased.
However, the situation is showing signs of improvement. The average delivery time has decreased, from around 6 months in late 2022 to less than 5 months currently. Some sources suggest that Toyota’s delivery time may continue to decrease to around 4 months from spring 2024 onwards.
Trang Nguyen (forum.autodaily.vn)
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