By
Svetlana Soroka
April 18th, 2024
For the second consecutive time, Japanese automobile giant Toyota is the biggest car seller in the world, beating out other major brands.
Toyota Motor Corp (NYSE: TM)recently announced that its vehicle sales surged by 10.1% in 2021, making it the world’s biggest car seller. The Japanese automaker has now netted that accolade for the second straight year. The development further extends its lead over its rival, Germany’s Volkswagen AG.
The milestone also saw Toyota surpass General Motors (NYSE: GM) as the best-selling car manufacturing company in the US last year. Up until now, no other carmaker based outside the US had achieved this feat. Erik Gordon, a University of Michigan business professor weighed in on this, saying:
“The dominance of the US automakers of the US market is just over. Toyota might not beat GM again this year, but the fact that they did it is symbolic of how the industry changed. No US automaker can think of themselves as entitled to market share just because they’re American.”
Toyota sold 10.5 million cars overall in 2021, also experiencing robust sales in China. By comparison, Volkswagen delivered 8.9 million vehicles for the same period, 5% less than 2020. This figure is Volkswagen’s lowest in a decade.
Toyota Attained Mantle of ‘Biggest Car Seller’ amid Industry Supply Chain Constraints
Toyota stated that it churned out that huge number of vehicles amid an ongoing global chip shortage. The automaker’s production lineup also included those of its affiliates, including mini-vehicle manufacturer Daihatsu Motor Co and truck maker Hino Motors Ltd.
Toyota is set to release its Q3 earnings in the first week of February. The company has hinted that supply chain constraints may affect normal production levels, causing it to miss its 9-million-vehicle production target. In fact, Toyota announced a temporary shutdown of factories earlier this month due to the Covid-triggered supply chain bottlenecks in Southeast Asia.
The shortage in semiconductors, a key component in the car manufacturing business, seems to be affecting Europe more than Asia. For instance, Ford Motor Company, GM, and Stellantis – an initiative between Fiat Chrysler and Peugeot – manufactured and sold fewer cars than anticipated in 2021. By comparison, Toyota fared better due to a prudent decision taken over ten years ago. In 2011, an earthquake and tsunami in Japan neutralized the production of multiple key components. Following this event, Toyota set aside large stockpiles of parts.
The chip shortage also seems to be directly pitting car manufacturers in direct competition with makers of consumer electronic devices. This is because the makers also require the semiconductors in the production of their own offerings.
Amid global chip shortages, several traditional car manufacturers are also facing increasing pressure to shift to electric vehicles. This is a cause that American EV automaker Tesla Inc (NASDAQ: TSLA) has been credited with noticeably championing. In fact, at the moment, Tesla is in the enviable position of having demand for its products substantially outstripping supply.