July 13, 2024
Toyota Exec Thinks Average New Car Prices Will Top K This Year: Report

The average brand-new car prices in the US are expected to rise above $50,000 this year, and executives at Toyota’s North American operations anticipate that this trend will continue, Automotive News reports.

This increase in prices is likely to occur despite the recovery of the supply chain, and it is expected that demand will outstrip supply again this year. Furthermore, the report suggests that there are 6 million potential new-vehicle buyers sidelined by inventory and pricing.

Jack Hollis, head of sales for Toyota Motor North America, has given an update on the automaker’s business, indicating that 2023 is expected to see Toyota and Lexus pick up another 100,000 sales above the 2.1 million they sold in the US last year.

However, it is also possible that there could be a slight drop in Toyota’s market share. According to Hollis, the year would likely be divided into two halves, with the first half falling short of last year and the second ahead of it.

Hollis expects the automaker to finish the year with about 30,000 vehicles in inventory sitting on dealer lots with continuing strong consumer demand, meaning “we will sell every vehicle that we can make.”

The report indicates that used-vehicle demand, buttressed by would-be new-vehicle shoppers priced out of the market, will continue to keep residual values high. However, the totality of the supply chain and its fragility is the only thing holding back the industry. According to Hollis, if the industry were not constrained by supply issues, it could sell 16.7 million to 17 million cars in the US this year.

Bob Young, vice president of purchasing supplier development, said inflationary pressures hitting the industry have largely been driven by rapidly rising raw materials costs but that Toyota is “starting to see some retreating in the markets.” “The inflationary pressures really are driving all of us to work more aggressively and collaboratively on cost reduction,” Young said, adding that any easing in commodity prices likely wouldn’t flow to end users until 2024.

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