NAGOYA, Japan — Toyota Motor expects to produce a record number of vehicles this year, a sign that the Japanese carmaker has overcome the negative impact of COVID-19 and is shooting for an aggressive expansion, Nikkei has learned.
Toyota plans to produce around 9.2 million vehicles worldwide through next December, up 17% from the previous 12 months. The figure surpasses by around 2% the number of units Toyota built in 2019, before the pandemic, and would be the most the storied Japanese automaker has ever made in a single year.
The production plan, based on sales estimates, becomes a model for similar plans at Toyota’s suppliers, including nearly 40,000 domestic manufacturers.
Toyota’s bullish plan could boost a big rebound among manufacturers.
The automaker had shown its production plan to core parts suppliers by early February. The plan reflects Toyota’s upbeat 2020 performance, especially in China, where it marked its eighth consecutive year of record sales.
Demand in North America and Japan is also on a strong rebound. Toyota is to officially decide on its production plan within this month.
These annual plans are traditionally made in late December, but the current semiconductor shortage caused some suppliers to balk at committing these components and urged Toyota to review the “provisional” production plan.
Toyota expects its China production to post a record this year and for its North American operations to also remain upbeat.
In Japan, the company expects to make nearly 3.2 million units this year, up 9% from 2020 but down 7% from 2019. The figure exceeds the 3 million cars Toyota says it needs to make domestically to maintain a skilled workforce and supply chain capable of keeping up with technology.
Meanwhile, the chip shortage is weighing on Toyota. “There is no problem for this fiscal year [through March],” a Toyota executive told Nikkei, “but in the future, there are some prospects for procurement and some without.”
An executive of Denso, which supplies advanced auto parts to Toyota, said at an earnings conference on Tuesday that “there is no impact at the moment but the supply and demand for chips will remain tight until summer.”
Toyota’s rebound in global sales last year was mainly led by new vehicle models, especially SUVs. The automaker in 2021 expects to expand sales of popular models such as the RAV4 compact SUV and the Harrier mid-size crossover SUV.
It believes sales will remain stable now that a host of countries has begun vaccinations and as COVID-19 infections begin to taper.
However, Toyota also sees reason for caution. Last year, the pandemic boosted demand for private vehicles and prompted wealthy people to spend money on luxury cars rather than travel, two trends that may not hold in 2021.