Toyota struggles to meet small car demand

[CheeseHead91182]

http://uk.reuters.com/article/motori...22649120080702

DETROIT (Reuters) - The surge in popularity for small cars and fuel-efficient hybrids has left Toyota facing an unusual problem: deepening shortages of popular models such as the Prius hybrid.
A limited inventory of small cars hurt Toyota, which reported a 11.5 percent drop in U.S. sales in June.

In stark contrast, Japanese rival Honda Motor Co reported a 13.8 percent sales rise on record demand for its Fit subcompact car and Civic sedan.
Toyota executives said a dwindling inventory of vehicles, such as the Prius, Yaris and Corolla, had forced the automaker to scramble to try to keep up with demand in June, a month when industry-wide U.S. auto sales dropped almost 9 percent.

Sales of Toyota's Prius, the top-selling hybrid in the U.S. market, fell 26 percent as dealers ran short of inventory and customers faced a six-month waiting list. Toyota said it would only partly be able to satisfy the backlog of demand from its dedicated Prius factory in Japan this year.
Hybrids command about a $5,000 price premium compared with equivalent vehicles without the expensive battery.

"It is very doubtful that there is going to be a lot of recovery this year to be able to satisfy consumer demand and that is very unfortunate," said Jim Lentz, Toyota's head of North American sales, referring to the Prius.
Toyota had a one-day supply of the Prius hybrid and a 2-1/2 day supply of its hybrid Camry sedan at the end of June

Inventory of other popular Toyota cars also ran low in June. Dealer supply of Corolla sedans was down to a 15-day supply, while Yaris had a 7-day supply at the end of June, the automaker said.

Toyota said it expected inventories of Yaris and Corolla to increase in August and was working to add capacity at its hybrid battery manufacturing plant in Japan.

The current generation Prius uses nickel-metal hydride batteries made by Panasonic EV, a joint venture between the automaker and Matsushita Electric Industrial Co Ltd.

Toyota, which put the world's first hybrid car on the road in 1997, has a goal of reaching global annual sales of 1 million hybrid vehicles soon after 2010 -- more than double last year's sales tally.

Toyota's Lentz said the production constraint made it hard to forecast how large the market for the hybrid model could be in the United States, the Japanese automaker's largest market.

"We don't know what the top end on Prius is," Lentz said.
In a J.D. Power survey, 72 percent of U.S. consumers said they were interested in buying a hybrid.

Overall, the U.S. sales performance of the three major Japanese automakers were mixed in June with Nissan Motor Co posting a 7.5 percent decline.
Honda bucked the downtrend in overall U.S. light car sales, outselling Chrysler LLC for the second consecutive month in June to grab the No. 3 spot in the U.S. market.

On a combined basis, the three major Japanese automakers increased their share of the U.S. market to 34.7 percent, up from 32.9 percent from a year ago.

The market share of the three Detroit automakers -- General Motors Corp, Ford Motor Co and Chrysler -- fell to 45.8 percent in June from 50.2 percent a year earlier.

Maybe they should turn the Tundra plant in Texas into Corolla/Prius plant.

[Dragon877]

with all those market analysts and marketing teams and all those people and these automakers couldn't figure out Americans are switching over to small fuel efficient compacts?

thank god i bought my corolla in march

[saltydog]

our guys for some reason want to build retro muscle cars. idiots

[TenZen]

Originally Posted by Dragon877

with all those market analysts and marketing teams and all those people and these automakers couldn't figure out Americans are switching over to small fuel efficient compacts?

thank god i bought my corolla in march

I guess they didn't see this shift happing this fast i guess.

[ECale3]

^ you guess?

[ECHOKnight2000]

Originally Posted by TenZen

I guess they didn't see this shift happing this fast i guess.

First off to everyone and all automakers this is a drastic shift in market. Its send shock waves through the business and even economy. Probably the most in a long time. So even Toyota is caught off guard. The domestics have generally short sighted goals. Is Toyota perfect? No. And no Toyota can't see in the future but if they don't put their eggs in one basket (ie. SUVS and trucks) they might be better off. The domestics as we know have bad management and tend to pour their hard work into what's now and not what's tomorrow. Obviously they need to do both but the point is the reason foreign makes are better off is not only do they have flexible plants in able to shift more of one car over another but also they have a better range in cars overall.

[vasia]

Toyota did see this coming, but everyone needs to understand the complexity of the situation. Many Toyota models over the past few months have been, or are about to undergo model changes. The Corolla had a model change earlier this year, and currently a model change is occuring at several Toyota factories for the Venza, 2010 Camry, and 2009 Rav4.

Prius sales for months have been limited by battery production, and Toyota can't do much until it's new battery factory is operational, which won't be for a few months.

Yaris sales (for years) have been, and continue to be strong. Now that Yaris sales have picked up here in the US, Toyota at the moment does not have enough production capacity to meet Yaris demand. Worldwide Yaris demand is quite huge right now, and it's not only the US market where demand is increasing.

Finally, Corolla demand is obviously increasing but Toyota has huge production capability for the Corolla so inventory levels are low, but so far alright.

Production cannot be changed or shifted over night. Toyota's factories are very flexible, and most of them are running at or near 100% capacity. When the factory is already at 100% capacity, it's not easy to add more production.

Inventory levels for the Yaris and Corolla will increase by next month which is a quick response from Toyota considering the circumstances.