Photo: Toyota
Toyota is aiming to claw back about a third of the production it lost in the last quarter. According to Reuters, three sources close to the automaker confirmed Toyota asked suppliers for extra parts that would enable it to build an extra 97,000 vehicles between December and the end of March.
Though Toyota weathered the global chip shortage better than most, it was not immune to its effects. The Japanese company reduced its initial production target for the financial year by about 300,000 vehicles, down to nine million in total. One critical factor was COVID-19 infection rates in Vietnam and Malaysia that slowed down the supply of important vehicle parts.
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However, infections are now on the decline in that area, and Toyota is hoping to capitalize by requesting more parts. To actually use those parts in vehicle assembly, though, it will have to temporarily add weekend shifts at its various manufacturing plants.
The demand for cars is reaching record highs and dealership lots all around the country are eerily empty. Most automakers have the infrastructure in place to meet this demand but global supply-chain issues have prevented them from being able to keep the supply going. As a result, new car prices have been rising, used car prices have skyrocketed, and some OEMs have even requested that customers return leases directly to them rather than to third parties.
My only question: Where in the world are people getting the money to afford buying all of these new vehicles? Oh, right — they’re not. In 2021, the average car loan length is nearly 72 months, and thanks to record low interest rates, even 84-month loans and longer are rising in popularity. These loans last far longer than the average American holds on to a car.
According to Infiniti Research, the ownership cycle of a car is now four years, down from around seven years just half a decade back. This is because cars are seen as status symbols rather than a means of transport. Does all of this feel like a bubble? It certainly looks like one…
Kurt Verlin was born in France and lives in the United States. Throughout his life he was always told French was the language of romance, but it was English he fell in love with. He likes cats, music, cars, 30 Rock, Formula 1, and pretending to be a race car driver in simulators; but most of all, he just likes to write about it all. See more articles by Kurt.
