Toyota Predicts Vehicle Production Increase in 2023, With Potential Challenges

Toyota Motor Corp. is forecasting that its vehicle production will exceed pre-pandemic levels, with output of as many as 10.6 million vehicles during 2023. However, the company has warned that final shipments could be 10% lower if it is unable to procure enough parts, especially semiconductors.

The new target would be a significant increase from the 9.2 million vehicles that Toyota has forecast for the fiscal year. The Japanese carmaker made 9.05 million vehicles in 2019.

As the world's leading car manufacturer, Toyota sets the standard for the rest of the global automobile industry and its suppliers. Volkswagen AG said last week that it expects supply bottlenecks to ease and that it is confident for 2023, citing higher orders. Even so, parts shortages stemming from Covid-related lockdowns have challenged the industry, on top of rising costs for materials and logistics.

Toyota said in a statement Monday that it is currently working toward a production volume of 10.6 million units for 2023, with a downward risk fluctuation range of approximately 10%.

Japanese carmaker Toyota has warned that there is a downside risk of 10% for the year. This is due to the ongoing trade tensions between the US and China, as well as the potential for further tariffs. Toyota is the latest in a string of Japanese companies to warn of the risks posed by the trade war.

Despite predicting a recovery last year, the Japanese auto manufacturer had to lower its production outlook for the current period in November. The company cited a persistent lack of chips as the reason for the production decrease.

According to Bloomberg Intelligence analyst Tatsuo Yoshida, Toyota's target of 10.6 million vehicles reflects the company's clear desire to reach that goal, despite downside risks due to parts procurement.

Toyota temporarily gave new car buyers just one smart key instead of two late last year, seeking to ration semiconductors. The measure applied to 14 models for sale in Japan, including Crown sedans, Prius hybrids and the battery-electric vehicle bZ4X. This underscores the chip shortage that is currently affecting the automotive industry.

This year's situation remains difficult to predict due to factors such as semiconductor shortages and the spread of Covid-19, according to Toyota.