HIGHLIGHTS
- The global semiconductor chip supply chain has previously been hit hard by the Covid-19 pandemic, causing the automotive industry to face production delays.
- In the face of global supply chain difficulties, Toyota’s new sales outlook was 15.5 million, lower than the previous forecast of 16.5 million.
- Toyota’s new outlook for sales in the United States is not based on consumer demand but on their predictions given the uncertain supply environment.
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Global supply chains continue to struggle
The global semiconductor chip supply chain has previously been hit hard by the Covid-19 pandemic. With the Russo-Ukrainian conflict, the pressure is on the chip industry as a result of the tight supply of rare gasses vital to the production process. Currently Ukraine supplies about 50% of the world’s neon gas, an indispensable product in chip production.
Chipmakers have struggled to cope with component shortages and rising raw material costs. This has caused industries that require large quantities of power management chips, especially the automotive industry, to face production delays. Moreover, the price of raw materials such as aluminum and nickel has also increased, causing the industry to also face a new wave of shortages of components.
Toyota’s latest statement on US sales
In the face of global supply chain difficulties, automakers are constantly reducing their sales forecasts going forward. Bob Carter, Toyota’s executive vice president of North American sales, said the group’s new sales outlook was 15.5 million, lower than the previous forecast of 16.5 million. He further pointed out that current supply chain challenges will persist for a long time.
Currently the auto manufacturing industry’s sales rate in the United States for the first quarter is 14.3 million, which is about the same year-on-year. However, if supply chain difficulties continue, sales will experience a “downward scenario” in the near future.
Carter emphasized that the new outlook for sales in the United States is not based on consumer demand but on their predictions given the uncertain supply environment. He also said that Toyota expects US sales this year for the Toyota and Lexus brands to reach 2.35 million vehicles.
Toyota’s vehicle-in-the-day supply in the United States is now just under two units down from a historic rate of 40 to 45 days. Carter said it will take six months for inventory ratios to return to normal, and expects that day-to-day sales will increase sharply within 30 days after the supply chain recovers.
Cong Lam
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