Toyota took a big hit from the coronavirus pandemic in 2020 but sees the new year as an opportunity to aim higher – significantly higher, in fact, with reports from well-placed sources in Japan indicating the company is targeting global production of 9.2 million in 2021.
That would not just mark a big rebound from last year’s losses — 7.9 million units of Toyota-only vehicles, down 12.6% — but position the Japanese giant to set an all-time record – and put itself within reach of once again reining as the world’s number one automotive manufacturer.
At the same time, Toyota is reportedly planning an increase in Japanese home-market production from 2.92 million last year to 3.2 million in 2021.
Auto industry, as a whole, struggles to dig out from pandemic
The auto industry, as a whole, was hammered in 2020, global vehicle sales plunging to 76.5 million, according to IHS Markit. The industry peaked at 94.3 million in 2017.
The good news is that the year ended on an upbeat note. China actually recovered from several years of decline and while the U.S. market was off by double digits, the final months of 2020 saw demand reach nearly pre-pandemic levels on the retail side of the market.
Analysts and industry planners expect even better numbers this year, IHS estimating a 9% rebound to 83.4 million vehicles worldwide. But a number of the industry leaders TheDetroitBureau.com has reached out to report signs that the recovery could come faster than expected.
2021 looking to be a solid year for sales
“I’m hopeful that 2021 has the potential to be a very solid year,” Randy Parker, the new Senior Vice President of Sales for Hyundai Motor America said in an interview. Parker pointed to one of the industry sticking points, the collapse of travel and, in particular, a freeze last year in car purchases by daily rental fleets. But, with the travel industry beginning to regain momentum, he said, “The fleet companies are starting to raise their hands again and want production.”
Toyota has not yet responded to a request for comment on the reports indicating it will aim for record production this year. But, if proved accurate, the target of 9.2 million vehicles would mark a nearly 2% increase over the automaker’s prior record of 9.05 million vehicles in 2019.
There could be numerous sticking points. Automakers around the world are still struggling to cope with the ongoing pandemic that require strict protocols to prevent the spread of the disease on plants floors, as Toyota officials in the U.S. noted last month during a media conference call.
Toyota production plans could be derailed by chip shortage
But it’s not just at company-owned plants. Some of the biggest bottlenecks come on the supplier side. And that’s where Toyota could run into production problems.
While Toyota factories, particularly in the U.S., had been running flat out, in part to make up for volume lost during temporary factory closures last year, the carmaker has been hit at several locations by shortages of critical microchips.
Toyota is by no means alone. Its main Japanese rivals have been forced to reduce or halt production at various plants, as have Western manufacturers including Ford and Volkswagen – General Motors halting production at four plants next week. The shortage of automotive chips could last until late in 2021, according to various experts.
But, barring any worsening of the shortages, or further complications from COVID, Toyota is confident that it will have need to build record numbers of new vehicles in 2021 to respond to rebounding demand in key markets like the U.S. and China.