Despite a challenging year for automakers, Toyota
continues to dominate new vehicle sales with its second-highest sales year ever. The company surpassed its sales goal for the last fiscal year, reaching its second-highest total ever with 9.5 million units sold. It’s impressive that Toyota is thriving and continuing to move inventory to keep up with demand, especially as supply chain disruptions and subsequent parts shortages have wrought havoc on many automakers’ production systems.
There are plenty of challenges ahead for Toyota
Bloomberg
notes that despite great demand for its vehicles as well as record transaction prices and profits, Toyota can probably expect some more challenges in the near future.That includes the fallout with investors caused by Toyota’s downgraded rating to “hold,” with Jefferies Financial Group Inc. blaming “bullish” auto industry earnings expectations through March 2023.
Inflation exacerbated by the conflict in Ukraine and a possible global economic slowdown could also hurt the automotive sector—Toyota included, if it doesn’t adjust its expectations.
Toyota is known for quality, reliability
But enough market talk. Let’s talk about why Toyota does so well with the people actually buying its vehicles.
Toyota vehicles have had a long reputation for reliability and affordability that carries over to recent vehicles as well. The Toyota Highlander, Prius, and Prius Prime were all on Consumer Reports’ list of the 10 most reliable cars of 2022.
Kelley Blue Book recently awarded Toyota with its Brand Image Award
for ‘Best Truck Brand’, surpassing Ford, GM and Ram. Toyota won based on its excellent reliability, capability and resale value, according to the award—beating out the domestic Detroit Big Three truck makers, which have dominated the U.S. market for decades.
Toyota’s electrified vehicles are also proving popular with critics and customers; U.S. News recently named the 2022 Toyota Highlander Hybrid the best hybrid and electric SUV.
Investing in hybrid vehicles has paid off
Toyota already looks to be planning for a future revolving around fuel-efficient or gas-alternative vehicles. The company is pumping a $383 million investment to boost production of hybrid vehicles in the U.S. to help meet increased demand for fuel-efficient cars and SUVs.
The company sees hybrids as a stepping stone of sorts to pure-electric ownership. They’re also cheaper to produce than all-electric vehicles, as the batteries are smaller—meaning fewer scarce resources to battle over.
Toyota could be well aware of the challenges it faces in the future. Hybrid vehicles could help position it to maintain similar or greater sales volume for the next fiscal year while at the same time making a move toward fuel-efficient vehicles to meet customer demands.
It also means they’ll likely avoid many of the pitfalls apparent in going all-electric
. Again, the components to make batteries are expensive and hard to come by lately. The means while other automakers are struggling to meet demand, Toyota could be sailing by with an abundance of appealing hybrids.