Nice problem, if you can have it. Global demand for Toyota's hybrid vehicles is exploding, putting the automaker and particularly its suppliers under pressure. According to sources close to the matter, parts shortages are causing delivery delays of several months for certain models, particularly in the U.S., Europe, China and Japan.
For Toyota, vindication in the face of doubters
Despite pessimistic predictions from some analysts as competitors focused solely on electric vehicles, Toyota is seeing its decision to continue to invest massively in hybrids largely rewarded. Global sales of hybrid models have tripled in five years, from 5.7 to 16.1 million units according to LMC Automotive.
Extended delays for customers
In Europe, the average waiting time for a Toyota hybrid model has doubled compared to 2020, reaching 60 to 70 days. Models particularly affected include the Yaris Cross hybrid and the RAV4 plug-in hybrid.
In Japan, buyers of Toyota hybrids are having to wait between two and five months. In India, a strategic market for Toyota, delays vary between two and nine months depending on the model.
Suppliers under pressure
The explosion in demand is creating bottlenecks in the supply chain. A shortage of magnets is affecting parts supplied to Aisin Corp, delaying the delivery of hybrid motors. Denso, another key supplier, is experiencing delays due to shortages experienced by its second and third-tier subcontractors.
Faced with these challenges, Toyota is considering diversifying its suppliers in India and producing in that country inverters, essential parts for energy management in hybrid vehicles.
Investments to meet demand
Toyota has already invested $14 billion in a battery plant in North Carolina, intended to supply its electrified vehicles in North America. Nearly half of the vehicles assembled by Toyota in the U.S. in 2023 were hybrids.
In India, Toyota has increased production capacity by 32,000 vehicles per year and plans to add another 100,000.
Other manufacturers also affected
Hyundai and Kia are also struggling to keep up with demand for their hybrid models. At Hyundai, the wait for a Palisade hybrid can be up to a year, while a Sorento hybrid requires a seven-month wait.
Honda, another major player in the market, confirms high demand, particularly in North America and Japan, without specifying delivery wait times.
Hybrids, a profitable choice for customers
Despite the long waits, many consumers consider the purchase of a hybrid profitable; in their view, fuel savings largely compensate for the months of waiting.
You can argue that for all the headaches, for these carmakers, this is a good problem to have. Demand is exceeding supply, at least temporarily. And for Toyota in particular, the trend confirms its place as the undisputed hybrid leader in the global automotive market.
