Toyota expects the average transaction price of new vehicles to exceed $50,000 in the U.S. for the first time in history but still believes that demand will outpace supply.
While recently speaking with reporters, head of sales for Toyota North America, Jack Hollis, said that average transaction prices “will continue to grow” beyond $50,000 throughout the year. This comes despite the average transaction price slipping 0.6 per cent in January to $49,388.
Auto News reports that there could be as many as 6 million potential new-vehicle buyers in the United States who have been sidelined by inventory and pricing issues. Despite this, Hollis still expects a strong year for Toyota in North America, stating that it and Lexus could sell 100,000 more vehicles than the 2.1 million units they sold in the U.S. last year.
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“We’re going to see that it’s a year of really two halves — whether it’s Toyota or Lexus,” Hollis said. “This first quarter, we knew it would be slower for us. The second quarter will still be a little slow — not quite as slow as the first quarter — but the first half will be behind last year, and the second half will be ahead of last year.”
Hollis noted that supply constraints continue to impact production not only at Toyota and Lexus but across the industry more broadly. Had these constraints not existed, the industry could have sold 16.7 million to 17 million vehicles this year.
“Instead, we’ll sell around 15 [million], so that means there’s another 2 million vehicles added to pent-up demand,” Hollis said.
Toyota’s vice president of purchasing supplier development added that rising raw material costs have prompted the car manufacturer to look for ways to cut costs. Hollis noted the brand will need to either pass on price increases to the consumer or absorb these costs themselves, impacting profitability.
