According to the Nikkei Shimbun, Toyota is facing a very difficult situation due to supply restrictions caused by the previous pandemic, resulting in production backlog. It has had to refuse half of the major model orders from Japanese dealers. Nikkei Shimbun asked several Toyota dealerships about the sales of 20 popular consumer car models.

　　As of mid November, all Toyota dealerships have stopped accepting orders for Alphard small trucks. Due to concerns about completing orders before the upcoming new model is released, the company has also suspended orders for the Land Cruiser 300 SUV.

　　Although the schedules of each dealer vary, the latest version of Alphard orders have been restricted since around early July, while orders for Aqua models planned for upgrades have stopped around September. However, sales restrictions have not affected the sales of models such as the Harrier SUV and the Corolla Cross.

　　Image source: Toyota Motor

　　From the overall order quantity of Toyota, in the seven months from April to October, Toyota dealerships across Japan only achieved year-on-year sales growth in two months. Compared to August last year, sales in August this year experienced a serious decline, mainly due to the launch of the Sienta hatchback last year, which significantly increased demand.

　　Most other car manufacturers have not encountered the same problem in meeting demand, and Toyota's current situation can be explained by three main factors:

　　On the one hand, demand exceeds production capacity. Toyota has raised its domestic production forecast for Toyota and Lexus in Japan for the 2023 fiscal year by 90000 units, reaching 3.34 million units, exceeding the pre pandemic forecast of 3.3 million units for the 2019 fiscal year. In October, Toyota's domestic sales increased by 18% year-on-year, reaching 133996 vehicles, marking the 10th consecutive month of year-on-year growth. According to the Japan Automobile Dealers Association, Toyota's market share in the Japanese automotive market increased by nearly 10 percentage points year-on-year from July to September, exceeding 50%.

　　Another factor may be the company's massive backlog of orders. In Toyota's production system, cars are produced based on orders, aiming to minimize inventory and waste. However, despite the shortage of chips caused by the pandemic and a decrease in production, Toyota is still accepting orders, and the backlog of orders reached about 1 million units at its peak.

　　In addition, Toyota's sales channel integration in 2020 may also be one reason. Previously, Toyota dealerships were divided into four categories, each of which could sell specific models, but now any Toyota model can be ordered from any dealership. A dealer executive stated that this has led to a "surge in orders" for some popular car models and an increase in order cancellations.

　　At present, the situation is gradually improving. The average delivery time of vehicles is decreasing, from about six months at the end of 2022 to less than five months currently. It is reported that by next spring, the delivery time will be further shortened to about four months.

　　Compared to mid November, restrictions on new orders have been relaxed, and the situation may return to normal after spring. But if the situation does not improve, consumers may start turning to competing models.