Toyota Will Run Out of Cars First
Toyota and its Lexus brand will experience the pain of tariffs early. Its dealer lots will soon be empty of its most popular models. The post Toyota Will Run Out of Cars First appeared first on 24/7 Wall St..
Tariffs will quickly slow U.S. car sales. However, some brands have models with almost no inventory. These may run out before tariffs affect car manufacturers’ American revenue, which will be hammered when they run out of parts and cars not affected because they have already been assembled and are on U.S. soil.
24/7 Wall St. Key Points:
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Toyota Motor Corp. (NYSE: TM) and its Lexus brand will experience the pain of tariffs early.
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Its dealer lots will soon be empty of its most popular models.
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Toyota Motor Corp. (NYSE: TM) and its luxury brand, Lexus, have almost no U.S. inventory for their most popular models. The parent company will experience the pain of tariffs early, as a huge portion of its global sales are in America. And its dealer lots will be empty soon. The cars Toyota makes today and in the future will have sharp increases in retail prices, or Toyota’s bottom line will be damaged.
The primary measure of how quickly a car model moves off lots is “days to turn.” That starts with the delivery of a car to a dealer and ends with the delivery of the vehicle to a buyer.
The car with the fewest days to turn is the Lexus NX Hybrid, at 28 days. The Lexus RX Hybrid follows it closely with 31 days to turn. Hybrids sell well because they get good mileage but do not have many of the drawbacks of electric vehicles.
The Toyota RAV 4 has only 32 days to turn. It is the best-selling car in America, and Toyota sold 475,193 units last year.
The Toyota Camry has only 36 days to turn. Last year, it was the sixth best-selling car in America. The Toyota Sienna has 37 days to turn, and the Lexus GX has 38 days.
Toyota will run out of its most popular models in a month. Then, it will find out if the people who buy them in the future will swallow higher prices.
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