Toyota Motor Corp. has recently confirmed that it will limit Lexus luxury car orders in Japan due to a component shortage, including in-vehicle semiconductors.

According to Nikkei Asia, the shortage is expected to last until 2023. As a result, the company has set a limit on the number of orders assigned to each dealership. This move may result in lost sales opportunities, necessitating the company's rebuilding of its supply network.

Japan has established an order limit for all ten Lexus models. Delivery delays caused by part shortages are more severe in luxury vehicles that use many semiconductors. Toyota will also strengthen delivery countermeasures in terms of systems to address this issue.

Toyota's Production Concerns

Reports tell us that the automaker will install a system this spring to share information on delivery dates up to two years in advance with dealers to ensure consistent order shipments.

Toyota has repeatedly reduced its production plan due to parts shortages and the Chinese lockdowns. Toyota's domestic market delivery delays are particularly noticeable, with sales down 13% from January to November 2022 compared to the same period last year.

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The company cut its March 2023 production plan by 500,000 units in November after initially planning to produce 9.7 million vehicles in May.

Each time this occurred, dealers were required to explain the delivery delay to customers. Customers have asked for more information.

Toyota, the Japanese auto manufacturer that has long been the industry leader, has recently been pushed to second place. The company, a division of Toyota Motor Company, is still one of the largest in the global automotive industry and operates in various segments, including SUVs and crossovers, trucks, and motorcycles.

According to Statista, Tesla overtook Toyota as the world's most valuable car brand in 2022, signaling a significant shift in the automotive industry. 

Tesla's brand value is estimated to be 75.9 billion US dollars, with Toyota coming in second with a brand value of 63.7 billion US dollars. Mercedes-Benz completes the top three, with a brand value of $56.5 billion.

Looking at the Future

Toyota plans to increase domestic production from January to March to mitigate the effects of the shortage and shift vehicles destined for export to the domestic market.

Furthermore, to avoid further supply issues, the company will look to procure semiconductors under long-term contracts within the group. This will help the company maintain a consistent supply of components and avoid future production disruptions.

Latest from Toyota

On Wednesday, Jan. 18, Toyota announced its plans to produce approximately 750,000 vehicles globally in February as it recovers from the pandemic's production disruptions.

According to Reuters, the Japanese automaker intends to produce approximately 300,000 vehicles domestically and about 450,000 internationally. In addition, the company stated that it would closely monitor the supply of auto parts, including semiconductors, to ensure that production runs smoothly.

The company produced 740,996 vehicles globally in February last year, exceeding its target of around 700,000.

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