Toyota: New Car Prices to Exceed $50K in 2021

Supply Chain Recovered, Price Increase Predicted

The average expense of a freshly purchased automobile in the US is projected to surpass $50,000 this year, according to Automotive News. Executives from Toyota’s North American division claim that this pattern is likely to persist.

It appears that a surge in prices can be anticipated despite the restoration of the supply line, and it is predicted that demand will be surpassing the availability again in the coming year. Additionally, the report indicates that there are 6 million potential buyers unable to purchase due to shortage of stock and pricing.

Jack Hollis, the head of sales for Toyota Motor North America, delivered an account of the car producer’s activity and projected that by 2023, Toyota and Lexus should attain a combined 100,000 more US sales than the 2.1 million they recorded in 2020.

Nevertheless, it is conceivable that Toyota’s occupancy of the market may undergo a moderate decrease. Hollis surmised that the coming year could split into two parts, in which the first portion falls short of being analogous to the preceding one and the second surpasses it.

“Hollis predicts that the automaker will end the year with around 30,000 vehicles in stock on dealer lots, due to sustained consumer demand,” he said. “We will be able to sell every vehicle we can produce.”

The report hints that used-car demand, bolstered by those unable to acquire new autos due to cost, will persist in sustaining strong residual values. Despite this, totality of the supply chain and its tenuousness is the only factor retarding the industry. Per Hollis, if there were no concerns with providing adequate crop, the automotive industry could be moving up to 16.7 – 17 million vehicles in the US this year.

Bob Young, vice president of purchasing supplier development, stated that inflationary pressures impacting the industry have been largely caused by quickly increasing raw materials costs, but Toyota is “beginning to observe some retreating in the markets.” “The inflationary pressures are really forcing all of us to work more collaboratively and aggressively on cost reduction,” Young added, indicating that any relief in commodity prices is unlikely to reach end users until 2024.

Source: Automotive News