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Toyota’s European sales surge hit by chip crunch

Toyota’s fast-paced growth in Europe to become the region’s second biggest-selling brand after Volkswagen has come to a halt after the microchip shortage finally caught up with the automaker.

Toyota’s market share including its Lexus luxury brand reached 6.7 percent through September in its European region, that includes Russia and Turkey, as vehicle sales grew 21 percent compared with the same period the year before, company data shows.

However, the company now estimates its market share in the region at the end of the year will fall to 6.3 percent with vehicle sales of just under 1.1 million, Toyota Europe CEO Matt Harrison said.

“We had managed to navigate the semiconductor supply disruption pretty well but then COVID swept through southeast Asia and Toyota was hit hard globally,” Harrison said.

“Europe was probably one of the hardest hit regions,” he told Automotive News Europe at the sidelines of a media event in Brussels.

Toyota had to cut production, hitting supply of its best-selling models such as the Yaris small car.

“If you look at our October, November, December share performance, it will not look anything like as good as the first part of the year,” Harrison said.

The Yaris had been consistently the No. 2 best-selling car in Europe after the VW Golf throughout the year, but it tumbled out of the top 10 for the month of October after registrations fell 54 percent, data from JATO Dynamics shows. Toyota sales overall fell 22 percent for the month.

Demand for Toyota’s vehicles has remained strong. Orders were so high in November that if that was extrapolated across a whole year, annual sales would hit 1.5 million, compared to 993,113 for 2020, Harrison said.

Harrison expects chip shortages to ease in 2022 and predicts a market share of “at least” 6.5 percent on sales of 1.3 million as three key new models hit the market.

The company expects a jump of 230,000 sales in Europe next year, mainly coming from a full year of sales of the Yaris Cross small SUV, as well as the launch of the SUV-styled Aygo Cross minicar and Corolla Cross compact SUV.

The extra 230,000 sales next year will be “by far the largest advance in our history,” Harrison said.

Toyota plans to hit 1.5 million sales in Europe by 2025, giving it a market share of 7 percent with Lexus included, the company has said previously.

Toyota includes Turkey, Russia and other former Soviet Union countries in its European territory, making comparisons with other automakers hard to make.

Toyota posted registrations of 606,298 passenger cars the European Union plus EFTA countries and the UK in the first 10 months, giving a market share of 6.1 percent according to data from industry group ACEA. Toyota’s share minus Lexus was second equal with Peugeot and behind VW, the data shows.

Harrison said Toyota’s sales success came because of its strong products, not because it had chips when rivals were struggling with shortages.

“Please do not be misled into thinking that our increasing success is down to our ability to supply vehicles when others could not,” he said.

He added that Toyota and Lexus order bank is at a record level, now covering over 4 months of sales.

Toyota expects to sell about half a million small cars in Europe in 2022.

The Yaris hatchback, with a second production line added late this year at Toyota’s plant in the Czech Republic, is set to grow to about 330,000 units next year.

Toyota Europe expects to sell 160,000 units of the Yaris Cross annually starting in 2022, Harrison said.

Meanwhile the Aygo Cross minicar in April will join a market that is being abandoned by automakers as they focus on more profitable, larger segments. Toyota expects the car to sell around 110,000 in a full year, Harrison said.

The new gasoline-only Aygo Cross draws on SUV design cues to better appeal to buyers.

The Corolla Cross will add a further 60,000 to 80,000 sales annually, a company insider told Automotive News Europe. The Corolla Cross will fit between its CH-R and RAV4 models and will go on sale in the second half of next year with deliveries to dealerships starting in autumn.

Through September, 70 percent of Toyota’s sales were gasoline-hybrid cars in western Europe and 59 percent in all its European markets, including Russia, company figures show.

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