Car rates

Toyota cuts U.S. industry’s outlook for new car sales in 22 over supply chain issues

Bob Carter, executive vice president of sales for Toyota Motor North America, speaks during a Toyota press conference at CES 2019 in Las Vegas, Nevada, U.S., January 7, 2019. REUTERS/Steve Marcus

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DETROIT, April 6 (Reuters) – Toyota Motor Corp (7203.T) on Wednesday lowered its 2022 forecast for new car sales in the U.S. auto industry, citing supply chain difficulties caused by the pandemic and the conflict in Ukraine.

The Japanese automaker’s new outlook of 15.5 million vehicles was down from its previous forecast of 16.5 million, Bob Carter, executive vice president of sales for Toyota Motor North America, said at a conference call.

“The supply chain challenges that we see … will stay with us for some time,” he said.

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The global automotive industry had already been hit by the COVID-19 pandemic and ensuing shortage of semiconductor chips even before Russia’s invasion of Ukraine affected parts of supply chain and contributed to soaring prices for raw materials such as aluminum and nickel.

Carter said the U.S. industry’s first-quarter sales rate was 14.3 million annualized, but he’s “reasonably confident” in the new guidance. However, he said there is a “negative scenario” of 14.9-15 million sales if supply chain difficulties continue.

Carter pointed out that the U.S. sales outlook is not demand-driven, as a sales rate of about 16 million could be achieved if automakers could build that many vehicles.

“It’s an adjustment that, frankly, is not based on consumer demand,” he said. “It’s based purely on what our projections of the supply environment will be.”

Carter said Toyota expects U.S. sales this year for its Toyota and Lexus brands to end at around 2.35 million vehicles.

While Carter expects some of the higher raw material costs to be passed on to consumers, he doesn’t see vehicle affordability as an issue this year. He said it would take six months for inventory rates to normalize after the supply chain resumes.

Toyota’s daily supply of vehicles in the United States now stands at less than two against a historical rate of 40 to 45 days. He expects that to recover to 30 days as the supply chain recovers.

“Vehicles are sold literally before they are built,” he said.

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Reporting by Ben Klayman in Detroit; Editing by Kirsten Donovan

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