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Toyota Is the First Big Name to Defy the Chip Shortage - No Reason to Party Just Yet

Toyota was one of the companies hit the hardest by the lack of semiconductors, but the most recent sales figures show the production of cars is slowly but surely returning to normal.
Toyota says it managed to boost its production in November 52 photos
Photo: Florin Profir/autoevolution
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The Japanese automaker says it sold over 884,000 vehicles in November, up 3.7 percent from the same month a year ago. Sales of the Toyota brand alone were also up 2.9 percent, to over 796,000 units.

Sales outside the domestic market went up no more, no less than 4.3 percent, to 711,000 units, with the Toyota brand obviously accounting for the lion’s share with more than 686,000 vehicles. Hino was the brand that recorded the biggest growth worldwide, with a 7 percent increase.

When it comes to production, Toyota says it built no more, no less than 982,000 vehicles worldwide, which means its output increased by 1.8 points versus the same month of 2021. While the Toyota brand was the one spearheading production with 833,000 units, Daihatsu posted the biggest growth, with a 6.1 percent increase and 132,000 vehicles built in November.

While Japanese production declined 3.3 percent, the output outside the domestic region went up 4.2 percent, to 619,000 vehicles.

Toyota says this is the first production decrease in four months for its domestic facilities, while the operations outside of Japan recorded the seventh consecutive month of YoY increase.

The January to November 2022 production numbers are in line with the 2021 figures, as the company has sold a total of 9.5 million vehicles so far. The production, however, increased 6.9 percent, to 9.7 million units.

The sales and production data seems to suggest that the chip shortage is approaching the end, but on the other hand, Toyota warns this isn’t the case. This is because the sales boom happened primarily in North America, the company says. Furthermore, the market is still recovering from the parts supply shortages that happened in Southeast Asia in 2021, so it kind of makes sense for the 2022 figures to be better than the ones recorded last year.

In the short term, the Japanese carmaker says, it’s still impossible to anticipate what is going to happen, mostly because the lack of semiconductors is likely to remain a major concern for carmakers worldwide. In other words, if you believed the chip shortage is over, well, that’s not the case, or at least, not for the time being. Most carmakers expect 2023 to be a difficult year from the global chip inventory perspective, especially as the market continues to struggle with new challenges, including rising inflation.

Needless to say, Toyota says it’s still doing its best to boost production and bring more vehicles to customers as soon as possible, but don’t be too surprised if you still have to wait many months to get the car you ordered.

GM's Flint assembly plant
Photo: GM
On the other hand, Toyota isn’t the only big company that expects the chip shortage to continue in 2023.

Not a long time ago, General Motors’ CEO Mary Barra said the company expects the lack of semiconductors to continue in 2023 and even “beyond.” While the 2023 forecast isn’t necessarily a surprise, the “beyond” is actually more concerning.

Intel previously estimated the global chip shortage wouldn’t come to an end before 2024, and the industry expectations now seem to align with this prediction.

But the most pessimistic analysts claim the inventory would remain constrained until at least 2027. This is because the world would have to face new challenges, including the rising costs of materials and instability caused by geopolitical tensions, not only in Europe, but also in other regions of the planet.

Back in November, Ford said it expected no “significant relief” from a chip perspective in 2023, suggesting that finally aligning the production with the demand was unlikely to happen next year. The company, however, promised to ship all unfinished vehicles to customers by the end of 2022, especially as it expected production to gain traction in November and December.

But at the end of the day, telling precisely when the chip crunch would come to an end is still impossible for the time being.

This is because of market instability, as the global inventory depends on production waves, which in turn are affected by various factors worldwide.

The end of 2022 obviously produced an important increase in output, but most industry analysts expect the first quarter of 2023 to generate a new slowdown. Back in November, tire makers, including the likes of Bridgestone, Pirelli, Michelin, and Yokohama, confirmed an increasing number of orders from carmakers, mostly as a result of accelerating production.

This means car production is gaining pace, so tire makers receive more orders. In theory, this is good news for customers, as the waiting times for new cars should drop significantly, at least until a new slowdown is recorded.

For now, however, it’s pretty clear nobody should hold their breath for the end of the chip shortage. The whole thing will probably continue in 2023 “and even beyond.”
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About the author: Bogdan Popa
Bogdan Popa profile photo

Bogdan keeps an eye on how technology is taking over the car world. His long-term goals are buying an 18-wheeler because he needs more space for his kid’s toys, and convincing Google and Apple that Android Auto and CarPlay deserve at least as much attention as their phones.
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