Semiconductor Shortage Slams Auto Sales in June. Ford Swoons. Toyota, after Hoarding Chips, Blows Away GM for First Time Ever

Toyota, pioneer of just-in-time inventory, goes: Hahahahaha…

By Wolf Richter for WOLF STREET.

Ford Motor was the last major automaker to report US sales for June on Friday. Most others reported US sales on Thursday. GM and FCA don’t report monthly sales; they only report quarterly, so Q2 sales. Tesla doesn’t report US sales at all; it only reports quarterly global sales, and the industry guesses its US sales. The semiconductor shortage and supply-chain fiasco were written all over auto sales in June.

For the auto industry overall, sales plunged in June.

June sales for the industry overall fell to 1.30 million vehicles, down 14.2% from June 2019, after a strong March, April, and May (data by Bureau of Economic Analysis). In terms of the Seasonally Adjusted Annual Rate (SAAR) of sales, which takes the number of selling days and other seasonal factors into account and then annualizes the result, vehicle sales came out this way:

  • June: 15.4 million SAAR, -9.5% from June 2019; except for the collapse last spring, it was the lowest for any month since January 2014.
  • May: 17.0 million SAAR, -1.0% from May 2019.
  • April: 18.6 million SAAR, highest total for any month in 16 years, +7.4% from April 2019.
  • March: 17.9 million SAAR, +7.9% from March 2019.

But don’t cry for automakers. They’re making it up with price.

Automakers have shifted production to their highest profit-margin units; and they’ve cut incentives, and dealers are charging record prices, over sticker in many cases. As a result, the average transaction price and average per-unit gross profits have spiked to records in June, as consumers have adopted a new attitude that I have never seen on dealer lots before.

Rather than haggle till they get the price down, or go on buyers’ strike as they had done for a couple of years during the Great Recession, consumers are paying whatever it takes to get a new or used vehicle as their whole mindset about inflation has changed.

Ford sales hobbled by massive production cuts due to chip shortage.

Ford sounded pretty chipper in the headline of the news release, focusing on the few things it did sell more of: “Ford Electrified Vehicle Sales up 117 Percent in June – Delivering New First Half Record – Mustang Mach-E Sales up 27 Percent Over May…”

But Ford’s total sales in June plunged 26.9% year-over-year to 115,789 vehicles, with retail sales down 32.5%. These are deliveries by dealers to their customers, or by Ford to large fleet customers, such as rental car companies.

Ford has given up on cars. The only “car” it still manufactures is the Mustang. It killed all its other car lines. And that sales volume just went to Toyota, Honda, Nissan, Kia, etc. And total car sales, after having collapsed every year for years, collapsed by another 82% in June year-over-year, to just 2,868 Mustangs and a handful of leftover Fusions that were still sitting on dealer lots.

F-150 sales plunged 30% year-over-year in June to 45,673 trucks. In terms of SUVs, Escape sales plunged 40% to 8,871 units, Explorer sales plunged 38% to 9,445 units, and Expedition sales plunged 43% to 7,453 units. These are all popular models with plenty of demand.

The problem wasn’t lack of demand, but lack of supply. At the end of April, Ford announced that it would likely cut global production in Q2 by half. The entire first half was marred by production cuts at various plants. On June 30, Ford announced further production cuts for July and August. The culprit is the same every time: semiconductor shortages and parts shortages.

Toyota, paragon of just-in-time inventory, blew everyone away by having stockpiled chips.

Following the Fukushima disaster in 2011, which massively tangled up its just-in-time supply chain, Toyota demanded from its suppliers that they stockpile two to six months of semiconductors of all kinds for Toyota to deal with supply shocks, Reuters reported in March based on sources.

Because of this “business continuity plan” (BCP), when the semiconductor shortages hit, suppliers were obligated to prioritize Toyota’s orders. The sources told Reuters that the microcontroller units (MCUs) that often combine CPUs, flash memory, and other devices, and that control functions such as braking, acceleration, steering, ignition, combustion, tire pressure gauges, and rain sensors, were hit the hardest by the chip shortages.

A Toyota spokesman told Reuters that one of the goals of its lean-inventories strategy was to become sensitive to inefficiencies and risks in supply chains, identify the potentially most damaging bottlenecks, and to devise a system to avoid them.

“The BCP for us was a classic lean solution,” a spokesman told Reuters. But Toyota pays the suppliers for this service. Turns out, those costs were a good investment.

In June, Toyota blew everyone away. While inventories were super tight due to production cuts with other automakers, Toyota had the supply and could meet demand, and demand was huge because people wanting to buy Ford or GM products had trouble finding them, and Toyota dealers had product.

And in June, Toyota’s total sales skyrocketed by 40%, blowing away GM and Ford and everyone. The hated cars that Ford threw under the bus, so to speak? Well, Toyota sold 68,771 cars, up 57% year-over-year. Ford sold 2,868 cars in June. Ford’s idiotic decision to walk away from cars just handed this market to Toyota and others.

Toyota also sold 77,944 SUVs, up 19% year-over-year. And it sold 138,560 trucks, up 33% year-over-year.

GM was bypassed in Q2 by Toyota for the first time ever.

General Motors doesn’t report monthly sales. It only reports quarterly. It reported Q2 sales of 688,236 vehicles, up 40% year-over-year – including record sales for its EV, the Bolt. But it was surpassed for the first time ever by Toyota (688,813 units in Q2).

Q2 included May when there was still more inventory, and it included April which was the biggest month for the industry since 2005. By reporting only quarterly, GM obscured the results of June under the strength of April and May, and it still got bypassed by Toyota.

The automakers’ changed data game.

All automakers used to release monthly sales data on the same day, a ritual that had been finely honed for many decades. They got these figures from their dealers, added them up, and released them with sales details by brand and model.

Then came Tesla, which didn’t play ball. It didn’t release US sales figures at all, but only global sales figures, and only quarterly.

Eventually, GM stopped releasing monthly figures as well and switched to quarterly, then Ford stopped, then FCA stopped, then others stopped. Last year, Ford backtracked and started releasing monthly figures again, but usually a day after everyone else. Go figure.

Monthly industry sales totals – both unadjusted and SAAR of sales – are released by the Bureau of Economic Analysis, which relies on industry estimates. There are other industry estimates available behind paywall. Getting all the detailed monthly data from automakers directly by brand and model is no longer possible for all automakers, including the biggies GM and FCA, and that was apparently a good thing because their sales in June were dismal.

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  153 comments for “Semiconductor Shortage Slams Auto Sales in June. Ford Swoons. Toyota, after Hoarding Chips, Blows Away GM for First Time Ever

  1. MiTurn says:

    “Following the Fukushima disaster in 2011…Toyota demanded from its suppliers that they stockpile two to six months”

    Is Toyota the only Japanese manufacturer to learn this lesson?

    • LGC says:

      why should their suppliers stockpile inventory? if toyota (or GM or Ford or BMW) wants 6 months supply, then THEY should stockpile 6 months supply.

      the whole JIT thing is BS, it just pushes the problem to the smaller guy who can least afford it and hides all the costs from the publicly traded companies.

      • SpencerG says:

        Welcome to the way of the world.

      • MarMar says:

        It wouldn’t make sense for Toyota to stockpile them. Then Toyota would have the ship the inventory to the suppliers, to be assembled and shipped back.

        Also note “But Toyota pays the suppliers for this service.”

      • Nacho Libre says:

        If one supplier refuses to do that, there will be ten more willing to take its place. It will be a ‘problem’ they are happy to take on.

        Moreover, this has nothing to do whether the demanding company is publicly traded or not.

        • Aravind says:

          Doesn’t quite work that way in the automotive industry. A microcontroller cannot be substituted by another, even from the same manufacturer. And it is very unlikely that Toyota deals directly with semiconductor suppliers. That is the responsibility of system suppliers like Nippon Denso, Robert Bosch, Continental, Aptiva and such.

          Every component, from the humble resistor to the microchip, has to go through the IATF16949 (formerly TS16949) qualification process. If Toyota awards an Engine Controller Module for a particular car model to say, Nippon Denso or Bosch, it is the supplier that owns the design of the Controller. However, the validated module and all of its components cannot be changed quickly once approval is given. The module that replaces it (and all of its hundreds of components) has to go through the rigorous qualification and validation processes again, which will take months. Meaning that if Nippon Denso has got approval of a module that uses automotive grade microcontrollers from Freescale, they can’t simply substitute that with another from Infineon. It would be almost like back to the drawing board. Similarly, Toyota won’t be able to ask other automotive system suppliers like Delphi or Visteon to supply Engine Controllers immediately to substitute the ones they are in short supply of from Denso or Bosch.

        • Nacho Libre says:

          @Aravind,

          Of course, thanks for the thorough write-up.

          Definitely not easy to switch to new chips in a hurry – from design/interface/foundry perspectives.

          And hence an even stronger reason for Toyota to ask the suppliers to keep several months of supplies ready.

          If one supplier doesn’t wish to sign such contract, there will be competitors who will. Unless that market is completely broken or monopolized.

      • fajensen says:

        Because they know how to do it better than Toyota, who for that reason pays them for that service?

        Using the Standard tape and reel packaging, in a normal storage, the electronics components goes “stale” and cannot be soldered reliably by machine any longer after about 6 months. Then they will end up in Chinese toys.

        People who care about that, like the military, they seal their spares in metal cans holding a protective atmosphere. Then they are good for years, maybe decades.

        People who have to make a profit don’t. They pay suppliers more for an environmentally controlled storage (and the supplier cleaning out the bad stock for Chinese toy makers).

      • Degobah Smith says:

        Amen to that. It’s been an issue in Aerospace manufacturing for years and has driven more than one of my clients out of business or forced unwarranted consolidation in an otherwise well-functioning industry.

        But the big guys get to save a buck, so there’s that…

      • Kurt Ellis says:

        interesting thing with a lot of larger japanese companies and their suppliers is that they don’t switch that often…. one salesman even told me that big company like honda will stay with a supplier forever as long as the supplier limits their profit margin to keep close to honda’s profit margin. that seems crazy i am sure to a lot of US companies but that’s what the man said

        • Lynn says:

          Loyalty makes perfect sense if you want consistency. It can’t be one sided for long term.

        • Lynn says:

          I have a specific Sigma camera lens rather than a Nikon for 2 reasons. One, it was much cheaper than the Nikon and has some newer technology that looked promising. The other reason is it was both designed and made in Japan. Nikon lenses are now made in Thailand. No problem with Thailand, but I like the idea of supporting Japanese workers and a companys’ loyalty to it’s employees.

          What surprised me was quality control. Japan was and is known for very good quality control. The Sigma lenses are very very good, especially for the price, but their quality control is not. I am not the only person to send a lens back because of slight defects. This happens with any brand of camera lenses, but it seems to me that Sigma has a larger percentage sent back. I see more people mentioning it online. It would not stop me from getting another Sigma lens BTW, I absolutely love my lens, I’d just be sure to thoroughly check any one I got. Sigma is a newer company and smaller than Nikon and so it has to offer better prices. But because of that I think, it’s QC has suffered a little.

          It’s a little scary that any company in a higher paying economy might have a huge problem competing with outsources. Even in Japan which seems to have manufacturing processes and lines of supply down pat.

          I kind of think the only way for a large company to be competitive in a higher earning country is to even out the wealth gap. If the top officers in any company earn too much then they can not afford to pay their workers enough to live and enough to care about their job. If they raise prices then they fall below the competitors in the long run.

      • WD says:

        Leverage, Toyota has it and if the “smaller guy” wants their business they will meet Toyotas stipulations. No one is forcing suppliers to stockpile anything they can say no.

  2. NelsNelson says:

    I remember when the automakers used to report sales every 10 days. It was Ben Bidwell, Vice-President of Sales for Ford who said his whole life was measured by 10-day sales reports. They were eliminated in the late seventies.

    In their latest sales report Ford made a big deal about the increase in the average transaction price. Looking at the sales by model Ford is putting all of its chips on the most profitable models. Sales of the Expedition and Navigator rose significantly. Furthermore, the new Bronco Sport which is nothing more than an Escape on steroids and sells for more than the Escape did very well.

    Overall selling fewer vehicles but making a lot more on what they sell.

  3. .
    Is not Ford’s CEO ex-Toyota?
    .

  4. Augustus Frost says:

    Just a matter of time before Ford and GM end up foreign owned too, disappear entirely, or keep whatever market share they can salvage by government decree if they can even pull it off.

    I believe GM is down to around 20% market share which is less than half from the early 80’s when the Reagan administration forced “voluntary” quotas on the Japanese automakers.

    If this seems implausible, what’s going to happen if (more like when) artificially cheap credit and lax lending standards end making it uneconomical to offer 84 month loans near 0% on vehicles most of their customers obviously cannot afford under more normal credit conditions?

    • roddy6667 says:

      GM makes and sells more cars in China than in America. Despite sharing of intellectual property, they also make more profit in China. This cash flows back to the US and helps to prop up the stateside operations.

      • Auldyin says:

        r6
        You’ve hit on an amazingly important factor for countries that look like basket cases on their balance of payments. These profits that flow back to the US from overseas investments actually balance the overall books. UK and US, in particular, have a very long history of owning assets overseas. We complain about China buying up our assets now but they are only doing what we did over all the years we were the top dogs. The repatriated sums are so little talked about, they are officially called ‘Invisibles’ in the National accounts. UK couldn’t survive without them!

        • Wolf Richter says:

          roddy6667 and Auldyin,

          Both are mistaken:

          In roddy6667’s case: GM makes most of its money in North America. per GM’s Annual Report. I used 2019 because it was the last full year before the Pandemic.

          “Equity income” from its joint ventures in China: $1.13 billion.

          GM total net income: $6.58 billion

          IN Auldyin’s case: the US Current Account Balance, which includes investment income, has been negative for over 20 years, through Q1 2021:

        • Investing in productive resources in China is the height of stupidity. It is only a matter of time before China steals any technology.

          We can thank all our politicians, republican and democrat alike, for presiding over the greatest stripping of wealth from our country, in order to stuff the wallets of a small number of billionaires and appease the average consumer with cheap products made in China.

        • Auldyin says:

          W
          Oops. I didn’t think BoP included ‘invisibles’
          The books have to balance, so does that mean, in the US, the books are balanced by the Capital A/c?
          The BoE always trots out ‘invisibles’ as a reason we shouldn’t worry about our chronic BoP.

        • char says:

          GM cars in China pay IP licensing fees to GM so equity income is not the only money going to GM. And wasn’t 2019 a really bad year for GM in China

    • Kurt Ellis says:

      most companies that size are foreign as far as i am concerned, despite their origin and HQ location. they will organize themselves any which way to make the most profit. even famously nationalist japanese companies: Nissan hired a gaijin as CEO and even switched their offical language to english. as far as ownership is concerned anyone can buy the stock and in the US 90% of stock is owned by 10%… rich people don’t identify with nationality.

    • Old School says:

      Automotive is highly cyclical and highly leveraged. If you include all the capital that’s been invested in automotive, government bailouts and Tesla burning through capital US automakers will probably be one of the worst places for capital investment the last 20 years after the next recession. Probably none left standing without $10,000 per year EV subsidies coming up.

  5. MonkeyBusiness says:

    Toyota is such a well run company.

  6. 2banana says:

    Ford should one up Toyota and back to analog controls and gauges

    “Toyota demanded from its suppliers that they stockpile two to six months of semiconductors of all kinds for Toyota to deal with supply shocks,”

    • Wolf Richter says:

      That would actually be cool. Kind of retro look.

      • Shells says:

        Agree. And a retro feel.

        • barryl says:

          And you can actually see them in the sunlight as well as feel where the controls are.

      • Educated but Poor Millennial says:

        Peugeot has started doing it, I missed my 206.

      • Realist says:

        French PSA does this on certain models to ensure parts other models.

        • Cashboy says:

          Is it still PSA?
          I thought it was now Stellantis.
          Stellantis is the consolidation of Peugeot, Citroen, Opel (Ex GM), Vauxhall ( Ex GM), FIAT group (Fiat, Lancia, Alfaromeo) and Chrysler.
          Basically a consolidation of the worst manufactured cars in the world.

      • Gabby Cat says:

        Coming from the rust belt I saw, as a child, entire families devastated by the shipment of jobs overseas to compete in a global market. Automakers eagerly jump at the chance to provide goods and services for great automobiles that were made much cheaper. Most said this is how business is done now, so deal with it. In the late 70’s many people could work hard, save cash from a part time job, and buy a mustang off of the showroom floor for around 8 grand. Many of my fathers friends in high school did this while working part time at a full service garage. When the economy of Carter hit, we were somewhat a self reliant nation. Supply and demand issues we see today are not the same from the 70’s. We have become such a greedy nation that highly educated people in their 40’s struggle to buy a house and a car at the same time. America could use a business that sells really nice car for 8K made in America again. We can only blame ourselves for this problem when we choose not to look for the Made in the USA symbol at the stores. We vote with our $ and stores would follow our request if we all ban together to do it. I think it’s ridiculous when the media tries to stereotype you as racist because you want to support your neighbors craft of making shoes, or the factory worker that builds the new car down the street. However, I was raised by Union retires from the mine and steel industries. They blindly followed the same policy makers that killed their jobs. We need a new common sense political party that worries about the cost for their neighbors.

        • Grego Hamilton says:

          Gabby,
          I’ve seen the same effect as you. A good book on the subject is “The Penniless Billionaires.” I think it basically describes what we are going through now. When inflation is high, billionaires who have access to cheap capital invest it and get richer, while the average person pays 25% on a credit card. In hyperinflation there is a great consolidation of wealth as we are seeing. I never realized that hyperinflation would benefit the oligarchs or the super rich. I thought it hurt everybody. I was mistaken.

    • 3D Modeler says:

      I purchased a brand new Pontiac Firebird in 1974 for $3,750 cash. The car functioned perfectly well, despite it having a carburetor, mechanical distributor, no air bags, etc. Just wonder what a carbon copy of that same vehicle would be priced at today if some manufacturer were to design and build it…notwithstanding that present-day emissions and safety regs would preclude its sale in the U.S. At least they wouldn’t have to worry about a chip shortage…

      • Apple says:

        They would sell poorly when people saw them get beat by a Toyota Corolla taking off at a green light.

        • 3D Modeler says:

          Lol…you’re probably right, Apple. Mine was a V8 w/ dual exhaust. I was in high school and couldn’t afford the Trans Am version. So I bought all of the Trans Am air extractors and fairings from the dealer and installed them myself. Installed a scooped fiberglass hood, headers, 4.10 gears, etc. A real fun car that was a piece of cake to work on. Hardly any computer chips.

      • Nick Kelly says:

        Despite some claims about autos being vastly improved, there are two huge improvements in past 30 +.
        I too began in the carb and ‘mechanical distributor’ era. By mechanical distributor. I assume you mean mechanical points, and we really don’t want to go back to them. or carbs.

        I have owned a large number of cars, mostly Asian but also Benz, Volvo etc. and have NEVER had a problem with either the fuel injection or the electronic ignition. I and millions like me have had lots of probs with carbs and points. Most folks reading this have probably never had a car refuse to start because it was ‘flooded’, the carb having delivered too much gas. Also, replacing the fuel injection with a carb would result in much lower economy.

        Unless folks are over 60 they may not remember the need for a ‘tune up’ which was billed as all kinds of stuff but really meant changing the plugs and points. The points were the replaceable contacts of a switch inside the distributor, which was constantly being turned on and off. The surfaces would erode. Today this is current is broken up electronically.

        Why break it up? At starting, and after, you have low volts available but need 10,000 plus to make a spark. This requires a step up transformer ( aka the coil ( s) but direct or battery current can’t be transformed, it must be turned on and off, causing the magnetic field in the primary coil’s primary windings to rise and fall. This cuts the larger number of windings of finer wire in the secondary and generates high voltage.

        • Nick Kelly says:

          PS: these two key chip tasks would only be a small fraction of all the chips for modern stuff, most of it unnecessary.

    • billytrip says:

      Unfortunately, modern cars’ emissions systems require computer control, there is no way to build a car today without microprocessors.

  7. Jay says:

    Toyota also paid cash upfront for chips and didn’t play these games of holding payments out 6 months.

    • Douglas says:

      This is seriously a great point. As a producer, I can say it is definitely the guy who walks up and pays the minute he gets delivery is the one who will be served first when the chips are down.

      • Depth Charge says:

        I am wondering when, as a cash buyer, I am finally treated that way by auto dealerships/manufacturers. My cash has meant nothing for almost 10 years now.

  8. Brent says:

    Dearborn,Dearborn
    My Daddy was a Ford Man
    Thats what I’m heading toward,man
    I wanna be a Ford Man too !!!
    (old song from the 60’s)

    To say that Ford ditched cars would be an overstatement.To be more precise – they ditched sedans like Crown Vic,Mercury Grand Marquis,Town Car,Taurus is hanging by its fingernails…

    Even cops are switching from Police Interceptor Sedan (spruced-up Mercury Grand Marquis) to Police Interceptor Utility (spruced-up Ford Explorer)

    My guess is that some (not all !!!) cops have an immense Ego and dont enjoy being looked down at by the Citizens in their tall shiny SUVs ☺

    • .
      Very true.

      This is why they should really be driving Ford Transits with the Interceptor packages.

      Best view, much safer in a crash and room for lots of gear and prisoners.
      .

      • Brent says:

        Woke PD’s are switching to Ford Fusion Hybrids-I sh… you not,it is 200% true !!!

        Meanwhile if they plan to turn all the new cars into Window Vista I will probably buy chip-less Kaiser Jeep or Willy’s or Ford Mutt…

        What was good for Gen Patton & Gen Eisenhower should be good for me too.They are selling for about $10K.And they are indestructible !!!

        • Wolf Richter says:

          Brent,

          Hey, the Fusion Hybrid is a sweet car. We have one. Gets around 40 mpg in the city, less on the highway (regenerative braking charges the battery). Big car too, looks good, drives nicely, very comfortable, relaxing with its CVT that never shifts. Ford is nuts to kill it.

          In terms of police departments, woke or not woke, they’re not buying any Fusion Hybrids anymore, because Ford stopped making them.

        • Brent says:

          Mercury Grand Marquis->Police Interceptor
          Ford Fusion->Police Responder

          So,Mr Richter,when you happen to be in the intercepting/ramming mood you need to borrow something bigger,MPG be damned…

          “We have one”

          Mother of Mercy,is this the end of Rico ?
          (Little Caesar,1931)

          NO EXCUSE,SIR !!!

        • crazytown says:

          Wolf – glad to hear we drive the same car. I absolutely love the Fusion Hybrid, I cannot believe Ford killed it. I have the Titanium model with the sunroof add on and sometimes I feel like I have a sports car and not a gas-sipping hybrid – that to me is a sign of a hybrid design done right. Ford is driving me into Toyota’s hands for my next car as I love their hybrid technology (I recall how Toyota and Ford used to share hybrid technology and so their systems are very similar and, in my opinion, best in the business). I know Ford has finally started to put their hybrid tech in their SUV’s with then new Escape and Explorer but they seem so far behind Toyota who has been pumping out hybrid Rav4 and Highlanders for years and years.

        • Sailorgirl says:

          I have a fusion hybrid also. 105k miles. Life time fuel avg 42.3. Still on original breaks. Have never needed a front end alignment. Batteries are still working great. Have to say the best car we have ever owned. It has needed nothing more than oil changes and door locks recall. Ford was foolish to kill the car. Those folks with big trucks and SUV’s have to be feeling the huge increase in gas prices about now.

        • DawnsEarlyLight says:

          Come on over to the Rav4 Hybrid Wolf, you will love it!

          Still have a Pontiac 2007 Vibe (really a Toyota), with 403K miles on it, 35 mpg (who needs batteries?), never had a problem. A/C still works!

        • DawnsEarlyLight says:

          Whoops, that’s 340K, not 430K miles! Our Arizona to Indiana shuttle!

        • PM says:

          The Fusion Hybrid makes allot of sense for local police departments, not say the highway Patrol/State Police. Most law enforcement vehicles troll around at low speeds and rarely drive more than 100 miles per shift. I work for a large PD in an urban area, the days of large V8 sedans are over. You can’t out run a radio.

    • Brian pawlak says:

      When I was in high school (1962-66) The Mustang, Comet Cyclone, Mercury were the best a young Ford lover could imagine. A sad lost dream now. Ford, Edison, Firestone all brilliant men who let us drive cheaply. WTF. I worked a Gulf station for a dollar an hour and paid cash for a new car in Dec 1966. Every year after that a new car every year for awhile. It’s over.

      • roddy6667 says:

        The middle class in America has lost buying power for over 50 years. It has backslid to the same as in 1967. I graduated high school in 1966, at about the financial peak of America.

        • Milton says:

          Same time all the Great Society welfare programs kicked in. Free stuff to anyone who doesn’t work. Plus large expansive government bureaucracy to give it away.

        • 91B20 1stCav (AUS) says:

          Milton-a poorly planned/executed P.R.-response to not-wrong Soviet propaganda that the U.S./Big Business/average citizenry was not living up to its own hypocritical propaganda about its Constitutional treatment of ALL of its citizens…

          may we ALL find a better day.

      • OrcasEatSharks says:

        Instead of buying a new car every year had you bought some more real estate in 1960s you would be a lot richer today.

    • Stecklan says:

      Guess again. First off, the Interceptor Sedan is a Taurus, not G.M. The G.M. has been dead for over 10 years.

      Ironically, cops LOVE the old Crown Victorias (G.M.’s as you call them). You’ll still see many around.

      Thirdly, have you ever sat in an Interceptor/Taurus? A pig of a car. Piss-poor visibility, Check out the back-seat–how can perps even get in? I can’t begin to list the failures of that Taurus as Interceptor.

      • Brent says:

        Yeah,you are correct,Police Intercepors are:
        First Gen:
        Crown Vic (1992-2011)
        Second Gen:
        Taurus (2012-2019)
        Third Gen:
        Explorer (2012-Present)
        Probably they follow Glock with their Gen1-Gen5 BS ☺
        I am not entirely off the mark either.Once I’ve got a warning ticket in Florida and FHP car was Mercury Marauder with silver letters “Police Interceptor”

    • OSP says:

      Can’t buy a Crown Vic or Grand Marquis anymore. They have been out of production since 2012.

    • Lynn says:

      Just out of curiosity, are those Police Interceptor Utility (spruced-up Ford Explorer) better built than the regular Ford Explorers? The Explorers in years past didn’t have a good reputation.

      I suppose when they’re retired their suspensions would be just as beat as the regular?

  9. Seneca’s Cliff says:

    I think what we are seeing is the begining of the end for mass ownership of cars. Chip shortages, rising prices, lack of profit in ordinary cars are all symptoms of an aging industry that is having a hard time making vehicles with a cost of ownership low enough for the average joe. Combine this with increases in the price of gas, the price of insurance, the cost of parking, new tolls and crumbling roads and the days of happy motoring are coming to an end for many. Cars won’ disappear, but the bottom 50% of the income brackets will have a harder and harder time affording to own and feed one. People think that because cars seem to be a necessity for most people that they will always be able to have one. But I think those days are drawing to a close.

    • 2banana says:

      One of the interesting tidbits in the excellent book “When Money Dies” is the absolute low rate of car ownership in Germany 1920s and early 30s.

      For example, in 1933 there was only 1 car for every 37 households in Germany, and the vast majority of these were owned by businesses. That equates to about one car per 120 people.

    • Xabier says:

      That is exactly correct. The beginning of the end.

      The Great Re-set – the ‘plan for global recovery’ aka ‘Build Back Better’ – envisages a much smaller EV fleet, not a replacement of the current fleet 1 for 1, and humans concentrated in ‘smart cities in ’20 minute neighbourhoods’.

      No vast suburbs, no inter-city car commuting, etc.

      This is the reality of Mark Carney’s plan, which is that of the BIS , the owners of the world, and the Bio-Digital-MIC, as an adaptation to the era of acute energy and resource crisis which is dawning – obvious to anyone who pays attention.

      • Auldyin says:

        X
        Did Carnie say his crowd would still travel the Worlds by huge limo’ and private helicopters and jets?
        Didn’t think so!

      • Depth Charge says:

        “Build Back Better” is the most nauseating slogan in history. And you know you’re in trouble when the WHO is parroting the same line as the demented old puppet who was installed.

        The people in charge of “building back better” are the ones who have billions and don’t want to lost a cent, but want you to have nothing and like it. And the sheeple are falling for this sh!t. What a bunch of ignoramuses.

    • endeavor says:

      If the inflation mind set is really taking hold, you can bet the government will take advantage too. Time for a dollar per gallon federal gas tax increase to build the EV infrastructure and blame it on climate change. Won’t happen until the 2022 midterms are over though.

    • Greg Hamilton says:

      Seneca,
      The author of “The Rise of Neo-Feudalism–A Warning to the Global Middle Class” agrees with you. He is more optimistic than I. He thinks this can be turned around. He also has a good summary of his book on youtube. His book is well thought out. Watch his video if you have the time.

    • 91B20 1stCav (AUS) says:

      Seneca-am old enough to remember in the ’50’s (and i DO hear you, the ‘…oh, gawd, NOT AGAIN!…’ folks…) when our family always had a new car, but its use was scheduled between the parents during the week, my father carpooling with fellow PacTel employees who i presume to have been in similar situations on the ‘off’ days. Times WERE different, the SoCal freeway systems and suburbs they fed were only starting to be extensively developed, and, i suspect a lag time post-WWII to yield a large enough used-vehicle population to sustain a robust market that wasn’t quite there, yet. Family didn’t go two-car until ’61 when my father acquired the in-laws ’52 straight-8 Pontiac 4-door as his beater-commuter.

      All this to say, convenience/necessity/adaptation remain locked in constant struggle among the citizenry of our ol’ country…

      may we all find a better (beater) day.

      • 91B20 1stCav (AUS) says:

        ps: forgot a very important, perhaps the most-important, aspect of the time>two-earner families were not yet the norm/necessity…

        may we all find a better day.

  10. Nathan Dumbrowski says:

    Noticed the low inventory last night when driving through the Columbus, GA auto mall. Part of me thought maybe they are storing vehicles offsite. Reality is that there is low inventory at multiple dealerships. Can’t wait to get to 2025. Hoping that by then everything is back to normal and markets have non-WTF on a daily

  11. SpencerG says:

    “Ford’s idiotic decision to walk away from cars just handed this market to Toyota and others.”

    Personally I have always wondered whether Elon Musk is the genius that everyone claims him to be. But when you are competing in a market with companies run by idiots…

    • Mojer says:

      Quite right when brilliant minds create successful companies and then retire due to age limits normally their seats are taken by ego-filled idiots to drive companies to bankruptcy, the question is who chooses these idiots? shareholders who have never accomplished anything in their life except to squander huge fortunes of savers

    • Antwan says:

      Usually agree with Wolf, but not on this. How would producing cars have helped Ford in its chip shortage? Ford’s sedans were aging and a refresh would’ve required diverting resources from things people actually want. In the end, Ford has a very strong lineup and pushed important products to market before Toyota did.

      – Fusion, Focus, Taurus all outdated. Do you suggest pulling an FCA/Stellantis by putting ridiculous powertrains in a la Charger and Challenger?
      – New F150 hit market before Tundra. Maverick revealed before even new Tacoma.
      – F150 lightning will be just EV pickup. F150 hybrid is the only hybrid pickup on market.
      – Mustang Mach E is the only competitive non-Tesla “SUV” on the market.
      – Escape and Explorer hybrids are one of the few SUV hybrids available on the market in their classes.

      Ford could never compete with Toyota, Honda, or Hyundai/Kia in sedans. Most people in that segment want low operating cost and reliability. A new Fusion or Focus does not spring to mind. Toyota can coast on reliability and sell old products for good money like the 4Runner or Lexus NX. Others have to discount big time like the Dodge Grand Caravan.

      • Paulo says:

        Before I scrapped my 86 Toyota 4X4 a few years ago, I used to regularly have people stop me on the street and ask to buy it. Never happened with my son’s 150 or his new Ram PU.

        The Ford Fiesta was very popular in Europe but Ford still scrapped it.

        The F 150 requires a special additive to the rear diff, and if owners don’t use it the gears strip. I just talked with an owner yesterday who recently spent $4k on his front gear package. $900 for new plugs the engine is so hard and cramped to work on. No thanks. My sister in law drives a fairly new 150. Sometimes the engine just quits. Stops. Lots of fun while people flip her off when she shuts down the afternoon highway commute. The ‘shop’ has no idea why this happens? Some chip problem. She drives in low grade fear wondering when it will let her down? Again. My tenant used to spend thousands per year on his F 150. He had buyer inertia and simply couldn’t imagine driving another vehicle. Ever. When the gas tank fell out while driving he finally gave up and bought a Dodge soccer-mom van. Loves it. The 150 is highly overrated as far as I’m concerned.

        The old F 100 was trouble free for the most part. Good construction vehicle.

        The company my son works for has hundreds of work trucks they beat to death in the oil patch. No Fords. The company is in maintenance, with 500+ mechanics/techs. The fleet are all Dodge Rams of varying sizes.

        I have absolutely no idea why people are so enamoured with Ford 150s. I look at what mechanics and working people who actually use their trucks drive. They seem to run GM and Rams. I don’t see many Ford commercials these days. I wonder why they sell much of anything?

        • VintageVNvet says:

          P: Most folks buy 150 because it is cheaper than the GM or Ram of equal performance, etc.
          Friend had 3 150s a few years ago, (just realized it was 20 years LOL ) and each of them had to have engine replaced, one of them 3 engines replaced,,, all were under warranty, but took weeks in shop each time, hurting his biz quite a bit…
          Now he has 250s, which are very solid work trucks, and he says he’s getting around 250-300K miles without any major work needed.
          I teased him a lot with the usual Chevy owner to Ford owner saying, ”Pay me now or pay me later.” ( Sold my ’84 Chevy w 340K on it 2018, after driving it across USA , again…) I like the RAM ”heavy half” replacement a lot; more haul, lots more tow, much better MPG.
          BTW, back 40 years + a good friend got out of Army where he was motor pool for years,( working up from PFC to Sr Sargent, ) he would only buy Ford trucks and GM cars because he had worked on so many of every kind over the years.

        • .
          I have a 2018 Ford Transit 250 and it has only needed oil changes.
          It can carry almost 4000 pounds and hold a few hundred cubic feet of cargo.
          And it fits in a regular parking space.
          It is great.
          .

        • wkevinw says:

          The F150 is a bit cheaper and has a bit higher towing capacity than the Chevy competition. That’s about it as far as I know.

          I have owned a few Chevy trucks. They have been very good vehicles. I have a full size Silverado 1/2 ton now. It has been a very good vehicle for 16 years now.

      • crazytown says:

        The Fusion and Focus sold quite well in the US. The newest Fiesta was a bit of a disaster for the US market and Ford made the idiotic decision to use the “PowerShift” transmission in the Focus with its dry clutches that had a habit of shredding apart. These models would not help with a chip shortage but they do help round out the lineup of vehicles to draw in customers. Problem is, GM and Ford now have an insatiable appetite to raise the ASP no matter what and sedans have a lower ASP than overpriced SUV’s that sell on 84 month loans. They are well on their way to becoming niche automakers – think of how high the ASP will be when GM only sells the mid-engine Corvette and Ford only sells the King Ranch F150.

        Toyota has been cranking out hybrid RAV4 and Highlanders for many years and the RAV4 hybrid has been notorious for high demand ever since the latest redesign a few years ago. People seek out the Rav4 hybrid, don’t think many people know about or care about the Escape hybrid.

      • SpencerG says:

        Antwan: You need to go back far further in your analysis. Ford has been abandoning the car market for ten to fifteen years now… and their mistakes have become a self-fulfilling prophesy.

        Here’s just one example. Prior to the Great Recession, Ford was selling over 150,000 units from the Panther platform (Crown Vic, Grand Marquis, Towncar) each and every year. Those vehicles were going to old people and police forces… neither of which need the latest and greatest redesigns… but who buy replacement vehicles on a regular schedule. It was the easiest gig in the automotive world.

        Ford shut those models down and tried to move customers over to the newly re-introduced Taurus and the new, sportier MXS.

        NEWS FLASH: Old people don’t want sportier Lincolns! When that didn’t work they had nothing left on the drawing board and in 2018 announced they were withdrawing from the car market altogether.

        With just that one platform, Ford gave up 5% of their TOTAL unit sales (and THIRTY PERCENT of their lost unit sales) since 2005 in the misguided belief that their marketing department could make it up by convincing customers to buy something else. It is the height of hubris and stupidity… and even now Ford continues to double down on its mistake rather than acknowledge that they made one. As Wolf says… Toyota is laughing all the way to the bank.

        • Micheal Engel says:

          Busted lips, Allan Mullaly, ugly cars that look like a rat on the roads, killed Ford small cars business. : Focus, Fiesta… Allen Flexed ego.

        • char says:

          Panther was an old platform that was loosing commonality with other cars. That means factories only working for one 100k market car. That is inefficient and expensive. and leads to loosing money.

        • Milton says:

          You can really thank the Obama Administration for killing these cars. All the government regulations made it impossible to sell them.

        • 91B20 1stCav (AUS) says:

          Milton-specifics, please. I understood that ‘government regulations’ affected ALL manufacturers…

          may we all find a better day.

    • char says:

      Ford lost money on cars and you can’t make it up in the future because in the (near) future all cars will be electric or a very small part of the market. And re-entering the market with an electric car, aka low height SUV, is relatively easy for Ford
      Ford made the right decision.

      ps. If you would design a new petrol car in 2030 you take an EV baukast and add a generator. Not a classic ICE with transmission. Those parts wont be manufactured anymore

  12. MF says:

    Maybe this is partly why nobody wants to go back to work for hourly wages? You need to make almost $40/hr to afford the average new vehicle. Even with all the frantic increases and incentives, we’re light years away from that.

    Why bust your butt when even late model used cars are out of reach? And apartments. And health care. And …. ad nauseum.

    Why not just give up, move into one of those shared group houses, smoke some now-legal weed and run the occasional gig as needed?

    • VintageVNvet says:

      Tried exactly your suggestion, starting in 1970 in London MF,,, it was fun for a while,,, a short while actually,,, but then the big ego(s) started in with the power trips, kinda/sorta the same kind of thing with almost every human group ever, eh? and the whole situation became challenging and even threatening…
      Tried it a few times in similar ”group” situations in various areas of USA after that, thinking it maybe possible if we all stayed stoned enough (no good weed in London, just hash for us peons at least) on the good weed available in NorCal and OR,, but results pretty much the same each time.
      Suggest you may want to come up with some other fantasy!

      • MF says:

        It’s not my fantasy Vintage. Just because I can see an issue from another person’s point of view doesn’t mean I agree with it or think it’s a good option for me.

  13. Brian pawlak says:

    I am sorry to say that GM and Ford are finally finished. Maybe all the top exec’s that have been plundering the coffers for years will get more Government assistance to live. GM still owes BILLIONS from the taxpayer bailout 11 years ago. I loved my Cadillac’s and Electra 225. When my GM stock went to 0, they offered me new preferred stock, really. The last new Cadillac I bought with a sticker price of 56K, was so bad that I gave it to my daughter with low miles on it. After 3 years she sold it for 1K.

    • Palm Beach says:

      Electra 225, back in the 80’s it was known as the
      “deuce and a quarter”

      • VintageVNvet says:

        Great American car, IF you didn’t mind all the rattles, etc., PB.
        FIL bought one for them when his daughter began to drive, and made them use the seat belts, figuring they were MUCH safer than if in the VW bug they wanted!

  14. Stecklan says:

    I read the article but not the comments.

    I drive GM and always have, but am glad to see this. My GM is old-school; I haven’t updated in almost a decade. I had to drive a relative’s new little Trailblazer with a 3-cylinder (LOL). What a crude little thing. My old car is SMOOTH. This thing rode like sheeeet, it even made a loud bang in the rear as if I ran over a boulder!

    Props to the Japanese. Props also to Scotty Kilmer on YouTube for speaking of this and for speaking his mind. A REAL AMERICAN.

    Did Toyota respond to the leftists crying about their past donations or whatever to Republicans? I hope not. Is this increased success really why the leftists are crying? I will look at Toyota next. Toyota=Success. Why reward failure?

    FYI in my neck of the woods, used car prices are decreasing and time-’til-sold is increasing. Several used Camrys for sale at excellent prices, days past they sold within hours. The beginning…

  15. K says:

    On the subject of Japan, this bubble situation in the US economy is like the bubbles blown up by the Bank of Japan, which may be privately owned like the deceitfully named ” Federal” Reserve owned by US banksters. I wonder if these events discussed or what will ultimately pop the bubbles, which will necessarily blow like firecrackers due to the HUGE margin at which stocks are held now.

    I suppose that the banksters’ “Fed” allowed the overuse of margin and the bubbles to enable the banksters and their cronies to sell the more insane “investments” to the dumb money, I.e., ordinary Americans. Instead of using vague, deceitful words like moral hazard, can we should just say that the same gang of thieves are defrauding Americans AGAIN.

    • K says:

      To clarify, the overuse of margin to buy stocks now, the ongoing retirement of baby boomers, the massive debt load of US companies and individual, who cannot pay their bills or roll over their debts if interest rates rise, and Wall Street crooks’ current, P o n z i schemes with CCP gangsters to sell all Americans garbage “stocks” of Chinese Enrons that will explode later, mean that the inflated stock market values will collapse — sooner or later. 1929’s depression may seem like a quaint little depression soon.

      One big, CCP Ponzi company explodes and then panic will ensue among investors to sell all garbage, CCP stocks. The time bombs are now ticking.

  16. Anthony says:

    At what point, do people realise they are being overcharged and start to get angry or is this the new dumbed, down normal.

  17. Franz-Xaver says:

    Toyota has been the most profitable of the big car manufacturers for how many years? It seems that will not change this year.

    • Greg Hamilton says:

      Franz,
      One curious aspect of many Tesla fanboys is their hatred of Toyota. I don’t know why. Toyota makes very reliable cars, and from what I understand the original Tesla model S’ engine design was changed to operate more like the electric engine in the Prius. Plus Toyota gas engines are extremely efficient. It is curious to me.

      • 91B20 1stCav (AUS) says:

        Greg-i dunno, maybe it’s a case of Toyota being averse to using much magical thinking in the running of its corporation and manufacture of its products, even though the public recently seems receptive to such strategies…

        may we all find a better day.

  18. Micheal Engel says:

    Ford problem ==> WTI @ $75 + tax.

  19. roddy6667 says:

    I just looked at Kelly Blue Book/car prices. in the years 2021 and 2022, there are no cars listed. None. Except a Mustang.

  20. NoPrep says:

    I can’t imagine that any of them, any top manager or executive in the auto business or for a dealership chain company (new or used vehicles), could have any idea where this is all going. Could anyone, for any company, actually formulate a coherent trustable plan that says for example “in July 2022 were are going to have x sales, x revenue)”.

    To be an auto boardroom man for any of them in these times must mean a lot of indigestion, ulcers, bipolar mental disorders (highs when sales are rebounding and roaring, lows when things go haywire and there’s a bad month, with worries this time there may actually be no rebound).

  21. Cobalt Programmer says:

    I am not a conspiracy theorist but American (F, GM, Fiat) and other car companies (Toyota, honda, korean) are in a state of truce. Big three will make mostly work related vehicles like truck and vans not cars. Japanese and koreans are making only family cars and small ones. There may be some agreements between them. who knows?

    Also kan-ban Japanese philosophy will work with them. Japanese are work minded people, who deliver or die trying. This worked well during good times for laid back American mindset. Does the national semiconductor factory still exists or just a credit union now?

    Also remember, most Japanese and Korean cars are actually made more in US than the real US cars. So probably toyota realizes it and kept the chips in hand. If I am a ford executive, I will send couple of my boys to be a “mole” in the toyota, honda,hyundai factory and bring in some intel.

    • Nathan Dumbrowski says:

      Back in the day I used to work at Toyota TFS HQ in Long Beach California. I had a ford Explorer. I always thought they thought I was the mole. It was strange to see a Ford in a sea of Toyota/Lexus vehicles. But damn I loved that Explorer

    • Petunia says:

      I watched a Korean drama on Netflix where the male lead drove a Cadillac SUV. In any scene where the actor drove the SUV, they made sure to show the emblem on the front of the car. It was product placement gone wild, pretty funny actually. But the Caddy was still really nice compared to the other cars in the show.

    • El Katz says:

      “I am not a conspiracy theorist but American (F, GM, Fiat) and other car companies (Toyota, honda, korean) are in a state of truce. Big three will make mostly work related vehicles like truck and vans not cars. Japanese and koreans are making only family cars and small ones. There may be some agreements between them. who knows?”

      Any such agreement might result in an anti-trust indictment…… courtesy of the department of just-us.

      • doug says:

        ‘result in an anti-trust indictment’
        Because that group has been so active lately?

      • Micheal Engel says:

        1) The low end disruptive cos from the seventies and the eighties,
        got better and pushed the established American cos out of
        markets and segments.
        2) Toyota have new competitors from S.K and China.
        3) They cannibalize themselves, reducing profit margin in many segments.
        4) GM is out of Europe, thriving in Gi-Gi-land.
        5) Ford is out a passengers cars in US, losing money.
        6) There is no conspiracy here : Ford & GM have been pushed
        to the corner, absorbing blows, by more skillful opponents.
        7) Ford and WV are committed to sustaining EV and self driving cars innovations.
        8) For Ford it’s not an option that can be written off
        with small losses.
        8) Ford is fully committed to trucks + EV, risking elimination in the next recession.
        9) They know that JP will provide a silk carpet.

        • char says:

          Problem with trucks is that they are horseless carriage design when you turn them into a BEV. So no pick up trucks in the future but another design

    • MonkeyBusiness says:

      Hanlon’s razor is a principle or rule of thumb that states “never attribute to malice that which is adequately explained by stupidity”.

      American car companies had every advantage compared to Japanese companies. Remember WWII?

      • Auldyin says:

        MB
        Ford accountants were World famous.
        Honda engineers were World famous.

    • Lynn says:

      No need for a mole. Dependability sells. Quality control sells. People work better and produce more reliable products if they are loyal and can take pride in their job. Loyalty and pride of work come from a company’s loyalty and it’s care of it’s employees. You get what you give.

      Housing close to work is another aspect of it, but it can sometimes fit into the above.

  22. David Hall says:

    Semiconductor companies planned to start the construction of 19 semiconductor chip fabs in China, U.S., Taiwan etc. this year.

    Artificial intelligence needs more chips. A car is not smart without a computer onboard.

    • c1ue says:

      It takes a long, long time to take a planned chip project from blueprint to actually making usable chips.
      The 19 plants are great – even assuming they all pan out – it will be years before they start producing usable product.

      A single EUV manufacturing machine can have a 2 year lead time – so that’s 2 years right there minimum (and that assumes no issues like export controls).

      Once you have the machines, you have to install and qualify the production line which takes a year or more.

      Once qual is done, actual volume production takes months more. And of course you need the qualified people to run the production line.

      Some of this is done in parallel, but we are talking multiple years, minimum, before new production will impact the supply situation.

      • David Hall says:

        I read one opinion of three years to build a chip fab. Some chip fab sites may be expanded rather than built from scratch. I counted $200 billion dollars worth of fab construction scheduled by Samsung and TSMC alone. Intel may help with about $30 billion in additional fab constructions. There are numerous other semiconductor companies not listed here.

        15 fab constructions were started in 2019. More were planned for 2020. Not sure if the pandemic interrupted these.

        • Petunia says:

          The freeze in Texas shut down the new Samsung plant. Still working on it, I think.

        • c1ue says:

          Expansions are not much better than new build.
          An expansion is simply building another fab on an existing site – but you still have to get the machines, train new workers, qual the line and improve quality of output.
          To this you would also add resource constraints: fabs consume enormous amounts of water and power and generate enormous amounts of waste.
          It is like saying we can just add to existing nuclear power plants because it is just an expansion. No, not really.

    • Lynn says:

      The US really needs to invest in that. For many reasons.

  23. Micheal Engel says:

    1) TM (Toyota) weekly trend, up vertically since May 3 2021, overextended :
    Take Mar 2020 23 low to July 27 close. // A parallel line from June 1st close.
    2) Toyota might be in troubles :
    3) FOMC GDP growth projection : down from 6.3% to 2.2% in 2022
    and 1.7% in 2023.
    4) The Fed provided ample liquidity to revive the comatose US economy causing inflated prices in gas pumps.
    5) The $6T BLM infrastructure will further inflate the pumps bubble.

  24. Micheal Engel says:

    6) EFFR – GDP % = (-) 6.3%. JP is worse than Greenspan.

  25. Xavier Caveat says:

    I’m still just breaking in my 11 year old sleigh ride with 158k on the odometer and it comes with an anti-theft device already in that it’s a manual transmission, but i’m worried about not only replacement, but also that it would be valued nowhere near the current market by my insurance company should it get stolen.

    For now i’ve bought one of those steering wheel-accelerator club things and put it on when parked, but also need to install a kill switch.

    • El Katz says:

      The “club things” are worthless. They just cut the steering wheel with a hack saw.

    • Brant Lee says:

      Same. I’ve never paid over 20K for a vehicle so I’m completely priced out of the car market for good I suppose. Saddle up.

    • doug says:

      rather than a kill switch, perhaps a 1/4 turn cutoff for the fuel line in the cockpit? The car will run for a block or so, and will be easy to find, and not torn up.

  26. c1ue says:

    Wolf,
    Your assessment of Toyota’s reasoning for its BCP plan is likely incorrect.
    Toyota experienced a serious supply chain problem in 1997 with the Aisin fire – so they have been aware, for many years, how a single supplier issue can affect their entire operation: https://en.wikipedia.org/wiki/1997_Aisin_fire

    • Wolf Richter says:

      They probably didn’t act on it or they wouldn’t gotten waylaid by supply-china issues following the Fukushima disaster.

      BTW, it’s not my theory; it’s what Toyota sources and a Toyota spokesperson told Reuters.

  27. DanS86 says:

    Repo Man cometh. Buyers market soonish.

  28. BuySome says:

    New motto (until we run out of buyable guzzoline)?>>>”There’s a Ford NOS/OE catalog in your future”.

  29. BrianC says:

    Will be interesting to see if GM/Ford ever get those customers back. I’ve driven all makes and while Toyota is by no means perfect (plenty of cheap plastics in my Highlander) their cars/trucks continue to perform admirably year after year.

  30. Brant Lee says:

    I passed a station with nat gas pumps for vehicles. The price in lights was $1.05

    Would that be equivalent to a gallon of gas?

  31. Glenn in STL says:

    One thing that I think makes now different (compared to 2008) is the widespread adoption of the 7 year auto loan. I think the shift to this longer amortization period is a big reason prices have had so far to run. Consumers are using a slightly different financing mechanism that allows for larger purchase prices.

  32. Depth Charge says:

    The local Toyota dealer has 1/10 of the inventory they normally carry. Methinks Toyota isn’t doing as well as it may appear insofar as manufacturing is concerned.

    • Sir Eduard R. Dingleberry III says:

      So it would seem that Toyota is pretending to have a shortage and then delivering as many orders as they can. And no one will know as long as they don’t keep inventory on the lot. Good to know since I am unfortunately in the market for a new car. Wolf really is the last journalist.

      • Depth Charge says:

        I have been “unfortunately in the market for a new car” at precisely the wrong time as well. It really sucks, to be honest. But, there are worse things in life. I am not buying until all of this nonsense is worked out. I refuse to pay msrp for a new car.

    • Wolf Richter says:

      Depth Charge,

      Look at Toyota’s huge sales volume. Sales just exploded this year. They sold down their inventory. Supply chain decisions are made long in advance based on sales estimates. They cannot just crank up production by 30%.

      • Wes says:

        Good reporting Mr. Richter. Yes, it’s sad that GM and Ford have abandoned the sedan automobile market and all the while Toyota and Honda have cleaned up. Why they have been able to sell them hand over fist and GM and Ford couldn’t seems to be a mystery.

  33. DawnsEarlyLight says:

    Happy and safe Holiday Wolf, enjoy that 65° clear weather!

    • Wolf Richter says:

      Thanks! Happy Independence Day to you and everyone here.

      We’re going to put on our heavy winter jackets and go down and watch the fireworks shoot into and fall out of the fog… kind of magic.

  34. Depth Charge says:

    A couple years ago I was all set to buy a brand new Chevy Colorado 4×4 diesel. Then I saw the interior. Cheap and tacky plastic does not even begin to subscribe it. When brands like Ram were producing gorgeous interiors, Chevy was adorning their new vehicles with features straight out of a 90s era Pontiac Sunbird. They need to fire their designers and hire away Ram’s.

  35. Chris Herbert says:

    It wasn’t the designers, it was the financial officers. BTW most inflation is caused by supply problems.

  36. misc.etc says:

    This video has an interesting take on the Toyota semi-conductor chip story.
    There are some things that I think that they missed, but interesting just the same. Basically Just-in-Time manufacturing is what made Toyota a success. It was everyone else’s poor adoption of the process that caused their failures.
    Why There are Now So Many Shortages (It’s Not COVID) by Wendover Productions.

  37. chris gould says:

    So – having worked at Kawasaki Motors in Lincoln Nebraska from 1974 to 1979 got my first intro to JIT – when interest rates were 15+% – BUT,,, when only 1 supplier is approved (funny how you can’t just substitute parts on a motorcycle) the JIT thing didn’t work so well when we ran out of rear tires for 3 days and stacked 1000 partially built bikes on front tires and center stands. Fast forward to 2002 working for GE “senior” management decided in their infinite wisdom that cost of carrying inventory was too high to ‘make’ the suppliers hold 3 months of stock (of course they raised the price) and we would draw down as needed daily – and, well, our production schedule changed (imagine that) and many suppliers were left holding the bag for a long time – thus they just refused to sign those LTA’s and hold inventory the next year. Lesson learned – JIT sounds good but unless you control your production schedule (no changes allowed) and/or you have a product with multiple approved suppliers; just pay for the inventory and enjoy uninterrupted production.

    • 91B20 1stCav (AUS) says:

      CG-GREAT real-world commentary, thank you!

      may we all find a better day.

  38. Ryan says:

    I’m not buying the narrative of the semiconductor shortage.
    I’m in the ‘hey, they shut down the economy for a year and locked everyone on their house, so there was no demand for cars. Let’s slash supply and see what sensational story will spark demand’ camp.

Comments are closed.