Toyota Plans To Produce Record 9.2 Million Vehicles This Year, 2% Above Pre-Pandemic Levels

Toyota Plans To Produce Record 9.2 Million Vehicles This Year, 2% Above Pre-Pandemic Levels

Japanese automaker Toyota Motor expects to manufacture a record 9.2 million vehicles worldwide in 2021, suggesting the auto industry may be shaking off negative effects of the pandemic.

KEY FACTS

Nikkei Asia of Japan reported on Wednesday that Toyota seeks to increase production this year by 17% over 2020; and by 2% over pre-pandemic 2019.

Nikkei notes that Toyota’s aggressive strategy could prompt other automakers to similarly expand their own manufacturing plans.

Toyota’s bullishness is partly driven by its strong performance in China, where it sold a record 1.8 million vehicles in 2020, an 11% jump from the prior year.

Nikkei notes that Toyota expects sales in China to set a new record this year, while sales in Japan are expected to jump by 9% to 3.2 million units (although that figure marks a 7% decline from 2019 Japan figures).

Toyota’s 2020 sales were largely driven by the popularity of new vehicle models, particularly SUVs, including the RAV4 model.

KEY BACKGROUND

Overall, global auto sales were estimated to have dropped by about 15% in 2020, according to research firm IHS Markit, as the pandemic temporarily shut down production plants and auto showrooms. Despite the optimistic outlook, Toyota faces a shortage of semiconductor components (which have a multitude of uses in automobiles including its electronic systems).  IndustryEurope.com reported this chip shortage is believed to be partly caused by semiconductor companies providing products for use in other electrical products, which were in high demand during the pandemic. For example, Forbes noted that chipmakers served high demand from “bored gamers” stuck at home during the long lockdown. “There is no problem [with the chip shortage] for this fiscal year [through March],” a Toyota executive told Nikkei. “But in the future, there are some prospects for procurement [of chips] and some without.” A senior official at Denso, a Japanese auto parts maker that supplies Toyota, said on Tuesday that “there is no impact at the moment but the supply and demand for chips will remain tight until summer.” .

SURPRISING FACT

Although 2020 was a “down” year for the automotive industry as a whole due to the pandemic, Toyota nonetheless became the world’s top-selling carmaker, supplanting Germany’s Volkswagen for the top spot.

WHAT TO WATCH FOR

IHS Markit expects global auto sales to jump to 84.4 million units this year, from 76.8 million in 2020 and eventually reach 94.8 million in 2025.

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