Nikkei recently conducted a survey among various Toyota dealerships to assess the sales performance of 20 popular car models. Starting from mid-November, orders for the Alphard minivan have been temporarily halted. Toyota has also ceased accepting orders for the Land Cruiser 300 due to concerns regarding the inability to meet the existing order volume.
Regarding the Alphard, the timing of order restrictions varies depending on the dealership, but these restrictions started becoming more stringent from early July, even though the latest version was made available in late June. However, some SUV models, such as the Harrier and Corolla Cross, have remained unaffected by these tightened ordering conditions.
These limitations on orders have had a significant impact on Toyota’s sales, particularly evident in the decline of sales in August, during the months of April to October.
According to Nikkei, there are three potential factors contributing to Toyota’s current situation.
Firstly, the demand has exceeded the company’s manufacturing capacity. Toyota has revised its domestic production forecast for Toyota and Lexus vehicles in the fiscal year 2023, increasing it by an additional 90,000 units to reach 3.34 million units. This forecast is higher than the previous estimate of 3.3 million units made prior to the occurrence of the pandemic.
Secondly, Toyota is facing a significant backlog of orders. Within the company’s system, cars are manufactured based on customer orders to minimize inventory and excessive production. Even during the chip shortage period caused by the Covid-19 outbreak, Toyota continued to accept orders. At its peak, the order backlog reached approximately 1 million vehicles.
Additionally, a change implemented by Toyota in 2020, which integrated sales channels, could also be a contributing factor. Previously, Toyota dealerships were divided into four types, with certain models only being sold at specific dealerships. However, the new approach allows customers to purchase any Toyota model from any dealership. An executive from one dealership stated that this change has resulted in a situation where “orders piled up for certain models,” leading to an increase in order cancellations.
Fortunately, there are signs of improvement in the current situation. The average delivery time has decreased from around 6 months in late 2022 to less than 5 months at present. Some sources even suggest that Toyota’s delivery time may continue to decrease to around 4 months starting from spring 2024.
Trang Nguyen (forum.autodaily.vn)
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