Toyota may be leading General Motors in the race to be the largest automaker in 2008, but the Japanese automaker has vastly under-estimated the U.S.’ slumping auto market. During the first few months of 2008, Toyota and Scion vehicle inventories have risen to record U.S. levels.
According to Automotive News, Toyota and Scion have 376,000 in dealer stock or en route to dealers — about a 100,000 unit increase over last summer’s numbers.
While Toyota ’s fuel efficient vehicles continue to sell well, the spike is largely due to an over production or trucks and SUVs. Toyota thought the market would remain relatively strong, but rising fuel prices and tighter credit markets have marked a sharp decrease in truck and SUV sales.
Toyota is also seeing an increase “turndown” inventory — the vehicles that dealers simply don’t want on their lots. “In the past, there have been only a few vehicles in the turndown pool,” a Southeast Toyota dealer told Automotive News. “Last month, Southeast Toyota had 9,700 vehicles that had been turned down twice by dealers and either sitting at the port or at sea. That’s a significant number.”
While an inventory excess is a negative in the grand scheme of things, it is actually proving to be beneficial for some Toyota dealers. Toyota stores in the Midwest typically see less vehicles than those dealers on the coasts, but excess volume has allowed these dealerships to get the extra cars they have been asking for years.
But overall, Toyota is not a car maker known for producing an excess amount of vehicles — a role usually reserved for the Big 3. Look for Toyota to continue to slow production of its largest vehicles at its Texan and Indiana plants.
