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Toyota Faces Inventory Shortages of Hybrid Vehicles

Posted on: Wednesday, 2 July 2008, 00:05 CDT

The growing demand for small, fuel-efficient hybrid cars has caused inventory shortages for Toyota Motor Corp.’s most popular models, such as the Prius, Yaris and Corolla. 

The Japanese automaker, which reported an 11.5 percent drop in U.S. sales last month, said a decreasing inventory of vehicles had forced the company to scramble to meet demand in June, a month in which U.S. auto sales were down nearly 9 percent industry-wide. As a result, Prius sales were down 26 percent as customers faced six-month waiting lists.  

At the end of June, Toyota had a 2-1/2 day supply of hybrid Camry sedans a one-day supply of the Prius hybrid.   Inventory of other top selling Toyota cars were also low in June. Dealer supply of Corolla sedans decreased to a 15-day supply, while Yaris had a 7-day supply at the end of June, Toyota said.

The company plans to partially meet its backlog of demand through its Prius factory in Japan.  

"It is very doubtful that there is going to be a lot of recovery this year to be able to satisfy consumer demand and that is very unfortunate," Jim Lentz, who heads Toyota's North American sales, told Reuters, in reference the Prius.

Meanwhile, Toyota’s Japanese rival Honda Motor Co reported a 13.8 percent sales increase as a result of record demand for its Civic sedan and Fit subcompact vehicles.

Toyota predicted inventories of Yaris and Corolla would grow in August. The company also said it is working to add capacity at its hybrid battery manufacturing plant in Japan.  

The current generation Prius has nickel-metal hydride batteries made by Panasonic EV. Typically, hybrid vehicles cost about $5,000 more than equivalent cars without the expensive battery.  Toyota launched the world's first hybrid car in 1997, and aims to achieve $1 billion in global annual sales of hybrid vehicles shortly after 2010, a number more than double last year's sales.

Lentz said production constraints made it difficult to forecast the U.S. market size for hybrid vehicles. The U.S. is the Japanese automaker's largest market, and the Prius is the top selling hybrid vehicle.

"We don't know what the top end on Prius is," Lentz told Reuters.

According to a J.D. Power survey, 72 percent of U.S. consumers reported interest in purchasing a hybrid vehicle.

U.S. sales performance was mixed for all of the three major Japanese automakers. On a combined basis, all three saw their U.S. market share grow to 34.7 percent, up from 32.9 percent from a year ago. The three Detroit automakers -- General Motors Corp, Ford Motor Co and Chrysler – saw their market share decline to 45.8 percent in June, down from 50.2 percent a year ago.

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On the Net:

www.toyota.com

Source: redOrbit staff and wire reports

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