Dealerships in Japan face cap on orders as Toyota gets to grips with components shortage.
Toyota Motor Corporation is preparing to limit Lexus orders in Japan, reports Nikkei Asia.
With the shortage of components, including in-vehicle semi-conductors, expected to continue through 2023, the company has set a cap on the number of orders allocated to each dealership.
A system to share information on delivery dates up to two years in advance with dealers will be installed this year to ensure stable shipments of orders.
Toyota has established order limits for nine models under the Lexus brand in Japan. The limits vary by dealership and, once they are sold out, no more orders can be taken.
As for the estimated delivery time for Lexus vehicles, the company does not give an estimate for most models except for those for which orders have been suspended, instead directing inquiries to franchises.
One dealer said that many models “will take at least six months, but it could be longer”. On the other hand, “Toyota brand” models, such as the Corolla, do not have limits. Toyota indicates estimated delivery times from the factory for 22 of the 37 models, reports Nikkei Asia.
Delivery delays due to parts shortages are more serious for luxury cars that use many semi-conductors. Lexus models use more than 1,000, several hundred more than a typical Toyota car. There is a chip shortage for various applications including remote-control keys for locking the vehicle and for audio equipment.
Toyota will also strengthen delivery counter-measures in terms of systems. Due to parts shortages and a lockdown in China, the company has already lowered its production plan for the 2023 fiscal year.
Last November, it lowered the plan for the year to the end of March 2023 by 500,000 units after it initially planned to produce 9.7 million units. Dealers had to explain the delivery delay to customers each time this happened.
Such delays in the domestic market are particularly noticeable for Toyota, where sales from January to November 2022 were down 13 per cent from the same period last year, in contrast to overseas sales, which were up two per cent.
This is because Japan is a market where high-end vehicles that require many semi-conductors sell better. Toyota will take measures such as increasing domestic production this January to March, as well as shifting vehicles earmarked for export to the domestic market.
It has not disclosed the production volume of Lexus cars, but they are mainly made at domestic plants and the profit per vehicle is about 1.5 million yen – about twice as profitable as other Toyota models, such as the Corolla. The company will look to procure semi-conductors under long-term contracts in the group to avoid further supply issues.
Keyword: Limit plan on Lexus orders