Toyotas Are So Hot, They Are Flying Off The Lot
Toyota dealers are running out of cars while competitors sit on months of unsold inventory, and the reasons behind this gap reveal just how dramatically the auto industry's pecking order has shifted.
According to Cox Automotive, Toyota (NYSE: TM | TM Price Prediction) has only a 35-day supply of inventory, the lowest among all car brands… People can’t buy a RAV4 Hybrid today. “It is really unusual to see cars fly off the dealers’ lots like this,” Jessica Caldwell, head of product insight at Edmunds, told CNBC.
To get a sense of how hot Toyota cars are now, the average days of supply across the industry in the US is 82 days. Toyota’s luxury brand, Lexus, ranks second among scarce brands at 41 days. At the far end of the spectrum, Ram’s inventory supply is 152 days.
Toyota’s inventory levels vary by model. Among the models that have sold the most units through the first three quarters of the year, in the top 25 as measured by Car and Driver, the Toyota Corolla ranks 11th with 195,141 units sold. The Tacoma ranks 9th with 214,875. The RAV4 ranks 7th at 253,644. The Camry ranks 6th at 260,684. Most other best-selling vehicles are traditional full-size pickups, including the Chevy Silverado (413,383), Ford F-150 (556,738), and Ram (325,348).
Why does Toyota do so well? It has been at or near the top of the list for high-quality cars. In the Consumer Reports reliability rankings, it is often No. 1. In J.D. Power, it’s usually in the top tier.
And Toyotas are affordable. The average price of a new car in the US is nearly $50,000. The RAV4 starts at $32,000. The Corolla starts at $23,000. The Camry starts at $30,000. And the Tacoma starts at $33,000.
As embarrassing as it is for Ford (NYSE: F), the No. 2 US car company is no longer No. 2 in sales in the US. Toyota holds that distinction, just behind GM (NYSE: GM).
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Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
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A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
