Jack Hollis, head of sales for Toyota North America, believes strong demand and continued supply-chain woes will see new-car prices rise higher.
said demand will keep exceeding the company's ability to build new vehicles, as pandemic-induced supply-chain issues continue in 2023.
Higher costs of raw materials are also a contributing factor, and while some of these costs are being passed onto the consumers, Hollis said Toyota is "eating it in our own profitability." In February, average new-car prices reached a new peak, jumping by 4.8 percent from a year ago to $46,229, according to. The consistent increases over the past few years may seem untenable—like the bubble will have to burst soon—but a Toyota executive thinks the average is only going to continue rising.
Hollis thinks that the U.S. car market could account for nearly 17 million sales in 2023, if it weren't for supply issues. The 15 million predicted sales for this year leaves "another 2 million vehicles added to pent-up demand." This will result in continued strong demand in the used-car market, lessening depreciation and keeping residual values high.
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