That Toyota RAV4 you’ve been thinking about buying?
You might have to wait a while.
Toyota on Thursday announced temporary vehicle production cuts at operations in Japan and North America due to the global shortage of semiconductor chips.
The move is expected to further cramp the availability of new Toyota cars and trucks, which have already been in short supply in some cases.
What vehicles will be limited?
“A little bit of everything,” Toyota spokesman Scott Vazin said in an email.
The slowdown in production affects all of the company’s North American plants, including factories in Indiana and Kentucky, and is expected to last through September and “likely” into October, Vazin said.
A shortage of new vehicles caused by the chip shortage has rippled across the auto industry, driving up used car prices to record highs and making currently leased vehicles more valuable. In some cases, used cars are increasing in value, shocking analysts who have long noted that cars are a depreciating asset.
Prices of new and used cars jump:It’s harder to buy a vehicle for less than $10,000
Toyota said it expects to reduce its output by about 60,000 to 90,000 vehicles in August and 80,000 in September.
Toyota has 14 plants in North America, including 10 in the U.S., with a total of more than 176,000 employees. The automaker’s U.S. plants made about 1 million of the 2.1 million vehicles the company sold in America in 2020.
The Toyota brand had only 20 days supply of new vehicles on hand at the end of July, while the company’s luxury Lexus brand had 23 days supply, according to Cox Automotive, which owns Kelley Blue Book and Autograder. The national average was 32 days.
“Toyota has been at or near the bottom for inventory for many months,” Autotrader analyst Michelle Krebs said in an email. “Lexus has been lowest among luxury makes.”
Part of the reason is that Toyota vehicles have been particularly popular during the pandemic, she said.
Toyota had already taken steps to reduce production in certain situations, including the output of the Tundra full-size pickup at its plant in San Antonio, Texas, said Chris Reynolds, Toyota North America executive.
“Long term we’re going to continue to work with our suppliers to get a better grasp of the global supply chain and minimize its impact,” said Reynolds, chief administrative officer of corporate resources.
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