Toyota sales continue to fall due to supply issues

The same supply shortages that have plagued Toyota Motor Corp. and every other global automaker since the start of 2021 persisted in June, helping to drive Toyota sales down 18% from a year ago.

Sales of the San Antonio-built Tundra pickup fell 7% to 7,098. It was the fewest Tundras sold in June since 2009.

The Japanese automaker began producing the redesigned Tundra late last year after a $400 million expansion at its South Side plant. Toyota also plans to start building the full-size Sequoia SUV in San Antonio this summer. Only 19 redwoods were sold last month.

Toyota’s overall sales in the first half of the year were 19% lower than the same period in 2021. In comparison, total US auto sales in the first half are expected to decline by 17% over last year, according to Cox Automotive projections.

Shortages of parts – especially computer chips – have been a major factor for nearly every automaker.

General Motors said on Friday that its second-quarter sales and profits will take a hit because it sits on 95,000 vehicles that it cannot sell because it is waiting for chips to complete them.

But despite a 15% slowdown in sales, GM snatched the crown as second-quarter leader from Toyota, which had beaten its Detroit-based rival the previous two quarters. Others reported deliveries on Friday, including Stellantis NV, Hyundai Motor Co. and Honda. All had fallen.

Toyota said output at its nine U.S. plants through May was 6% lower than a year ago “due to the impact of parts supply shortages caused by higher demand.”

Toyota also faced a cyberattack in late February that forced it to halt production at its 14 factories in Japan. In late January, the automaker temporarily cut production at its San Antonio plant in half due to rising COVID-19 cases and parts shortages.

As major automakers grapple with supply issues, production of new cars has been unable to meet consumer demand.

There were just over one million new vehicles for sale in the United States in June, compared to more than 2.7 million vehicles in inventory at the same time two years ago.

“Even though economic conditions have deteriorated in recent months, lack of supply remains the biggest headwind facing the auto industry today,” said Charlie Chesbrough, senior economist at Cox Automotive. “There has been no significant change in the conditions on the pitch since last fall.”

Tighter supply pushes prices up. The average transaction price for a new vehicle topped $47,000 for the first time in May, a 15% increase from a year ago, according to Kelley Blue Book.

So far this year, only 16% of new vehicles sold in the United States cost less than $30,000, reflecting declining affordability. Meanwhile, one in five new cars sold this year costs more than $60,000, according to Cox Automotive.

Supply issues have persisted longer than most analysts expected. Cox analysts lowered their annual new car sales forecast for the second time this year to 14.4 million, which would mean fewer cars sold in the United States this year than even in 2020, when the pandemic was ravaging the Mondial economy.

Last week, Toyota announced plans to increase global production from July to September to compensate for plant disruptions. It plans to build 800,000 vehicles in July, up from nearly 635,000 in May.

Lack of supply isn’t the only challenge facing car buyers.

Rising interest rates also make it more expensive to buy a car. The average monthly payment on a new vehicle was $698 in June, according to consumer research firm JD Power.

Despite higher interest rates and growing expectation among consumers of an impending recession, “consumer demand remains significantly outpacing available supply,” said Thomas King, president of data and analytics at JD Power. “With each additional month of inventory constraints, the pent-up demand for new vehicles grows more and more.”

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