The production and sales have also fallen. Toyota wants to keep the sales crown, and make the crown and Lexus first?

As the world’s No. 1 car company by sales, Toyota has cut production again. Recently, Toyota once again announced production cuts, involving nearly 11 production lines. The reason is still the continuous shortage of chips and the problems of the supply chain such as electromagnetic steel plates. Toyota also said in the third quarter of this year that it hopes to maintain a monthly production capacity of 900,000 vehicles in September, October and November. But in fact, Toyota cut 50,000 vehicles in September, and is expected to cut production by about 100,000 vehicles in October and November. Different from the previous “hard mouth”, this time Toyota finally let go of its production target of 9.7 million vehicles this year, and the new production target will be lowered to about 9.5 million vehicles (the calculation scope only includes Toyota and Lexus brands, excluding Daihatsu. , Hino and other sub-brands). Will this move to shake Toyota’s “world first” throne? Will Toyota and many mainstream Japanese brands, which have been relatively slow in electrification, enter the downward channel as a whole with this supply chain crisis?

Still the No. 1 sales volume in the world, but the overall trend of Japanese cars is weak

First of all, it is certain that Toyota’s position as the world’s No. 1 sales volume is still difficult to shake in a short period of time. For Toyota, despite repeated production cuts, the new target of 9.5 million vehicles is still about 10% higher than last year’s production capacity. Even if this data may have new changes at the end of the year, in terms of total sales, only Volkswagen can be relatively close to Toyota. However, Volkswagen has clearly focused its attention on the field of pure electric vehicles, especially in the context of the European Union’s plan to require automakers to achieve zero-emission goals by 2035. Volkswagen has no subjective willingness to compete with Toyota. The total number of cars is high and low.

Under the circumstance that traditional fuel vehicles still occupy the absolute main force in the current market, the Japanese car brands dominated by Toyota seem to have the momentum to earn the last copper plate. In terms of electrification, strategic ambiguity and indecision seem to be the main theme of Toyota. Almost at the same time as another production cut news was released, Toyota also reported the news that it would stop the production plan of the pure electric model of the Crown and FJ Cruiser models. Previously, Toyota had released 15 electric models in one go, and announced that it would launch 30 electric vehicles by 2030. But not long after the plan was announced, two products were already expected to die. This raises a big question mark about the rigor and execution of its overall strategy.

And the “last copper plate” that continues to make profits in the field of fuel vehicles does not seem to be so easy. Take the U.S. market, which is an extremely important overseas market for Japanese brands such as Toyota, as an example. In the third quarter of this year, the Toyota brand has been surpassed by Ford in total sales in the U.S. market, with both sales exceeding 410,000 vehicles. But at the same time last year, Toyota was ahead of Ford by more than 50,000 vehicles. It is worth noting that Chevrolet increased by more than 80,000 vehicles in the third quarter, which is close to Toyota. Toyota’s hometown Honda and Nissan also declined in the U.S. market in the third quarter. In particular, the Honda brand, although still in the top four in terms of single-brand sales, fell by more than 100,000 units in the third quarter of last year.

This trend is also the same in the field of luxury cars. In the first three quarters of this year, Mercedes-Benz and BMW have ushered in positive growth in the US market. And Lexus, which has always claimed to know Americans better, ushered in a year-on-year decline of more than 30% in the third quarter. Similarly, Acura fell by more than 40%, but Infiniti ushered in positive growth, but due to its small size, it is even difficult to line up in the second echelon of American luxury cars this season.

Behind the squeeze of traditional car companies, Japanese cars, which have always regarded the American market as their back garden, are still facing the strong challenges of new American car companies. In the first three quarters of this year, the best-selling single-product model in the United States is still the Camry, followed by the Corolla, but both vehicles have fallen by more than 10% year-on-year. The Tesla Model 3 squeezed into the top three, and its sales increased by more than 57% in the first three quarters of last year. As for the Honda Accord and Civic, which were still on the list with Toyota in the same period last year, they experienced a sharp decline in the first three quarters of this year. Among them, the Accord fell by nearly 30% year-on-year, and the Civic was even cut in half.

The crown is made first, and Lexus will come sooner or later?

Last year (2021), Toyota beat GM for the first time with 2.3 million vehicles. However, in the context of the counterattack of local American brands and the rapid transition to electrification in the North American market, the advantages accumulated by Japanese car brands such as Toyota seem to have not had time to consolidate. Even the current supply chain woes are holding back Toyota’s capacity plans. According to relevant data disclosed last year, although about 70% of Toyota models sold in the US market are produced locally (US), nearly 30% of sales are still imported from Japan.

In stark contrast is the Chinese market. Last year, FAW Toyota and GAC Toyota contributed about 860,000 vehicles and about 840,000 vehicles respectively, a year-on-year increase of 8% and 11% respectively. Compared with Toyota’s global sales growth rate of about 10% last year, it can only be regarded as quite satisfactory. Even in total, it can’t compare to the American market on the other side of the ocean. However, according to relevant statistics, as of the third quarter of this year, GAC Toyota had sold more than 700,000 vehicles, a year-on-year increase of more than 16%; FAW Toyota sold more than 580,000 vehicles, almost the same as the same period last year. Under the influence of the epidemic, it can still perform like this. At least for Toyota, the potential of the Chinese market has not been fully stimulated. The North and South Volkswagen next door has already handed over more than 2.2 million transcripts in China in the first three quarters.

Toyota’s high localization rate in China’s industrial chain is a major prerequisite for its stable performance in terms of production and sales. However, the reason why Toyota’s potential in the Chinese market is difficult to be further stimulated is also due to the problem of localization, that is, domestic products need to be enriched, and the proportion of domestic high-end products is low. As we all know, Toyota has a richer and more directional product matrix in the North American market. But in the Chinese market, especially before the introduction of the TNGA architecture, the Camry, Highlander, Corolla, and RAV4 Rongfang were almost the “all” representatives of the Toyota brand.

Not to mention the form of daring to cooperate deeply with BYD like Toyota bZ3. As for a domestic Lexus issue, it has been tugging for many years, and it is about to become a story of “the wolf is coming”. However, now that the sales of Lexus in China are declining, coupled with the strong rise of new energy vehicles in China, can the topic of domestic production of Lexus still arouse the interest of domestic consumers? At least after Lexus plans to transform into a pure electric brand, I personally think that its domestic hope may be greater than any previous rumors. Because the supply chain and technology application of pure electric vehicle manufacturing are still separated from the Chinese market and industrial chain, the transformation of Lexus may be more difficult than imagined.

However, outside of Lexus, Toyota has shown its sincerity in the Chinese market, and there is another opportunity, that is, to take the lead in making the crown domestically. However, this crown is not more than the crown. After Lexus plans to transform into a pure electric brand, the crown is taken up by Toyota and plans to enrich from a single model to a new luxury brand based on the global market.

It is said that the Crown is an opportunity for Toyota in China, because apart from Japan and some Southeast Asian markets, China is the second home of the Crown brand. On a global scale, Crown can only be regarded as a cutting-edge brand that wants to enter the luxury car market. But in China, Crown’s reputation doesn’t even need much rebuilding. The previous attempts of FAW Toyota on models such as the Crown Land and Fang have proved that domestic consumers’ awareness of the brand is still worth looking forward to. In the new Crown brand strategy, we can also see that the hybrid system will become the main project, which can also complement the domestic “Roadmap 2.0” plan. Even by 2035, fuel-efficient vehicles, including hybrids, are planned to receive half of the market pie. In terms of technology, Toyota’s hybrid system models are also quite mature in China.

At present, the first model under Crown’s new brand strategy, the Crown SportCross (overseas version of the Crown Crossover), is expected to be unveiled in China next month. According to previous reports, the car will be manufactured and sold in China in the form of CKD, and in principle it is still an import. Of course, unless it is a niche model that completely takes the limited route, methods such as CKD or a small amount of imports can often be regarded as a prelude to localization. In the global market, the crown brand will take over the achievements of Lexus in the traditional luxury field. In the Chinese market, the domestic production of crowns brings new increments and product enhancements. In this way, it seems to be a good way to help Toyota to seek more time and space to move around in the strategic transformation of new energy?