With inventories at record lows, millions of American car buyers are expected to order vehicles rather than wait for the right model to show up on the lot — and Toyota wants to make it easier to figure out when that vehicle actually will show up at the dealership.
COVID and the semiconductor shortage have resulted in repeated production cuts at auto plants around the world. As a result, dealers have seen inventories drop to record lows this year. And it’s far from clear when things will improve. The number of vehicles on U.S. dealer lots dropped again in February, according to Bank of America Global Research, to barely 1 million, or 61% below the five-year average for this time of year.
At the current pace, nearly 6 million car buyers could pre-order vehicles, according to industry data. But the challenge is to figure out when they’ll arrive at the showroom, a process that can take anywhere from a few days to more than three months. That’s where Toyota’s Project ETA comes in.
Adding transparency
With plans to roll it out to Toyota retailers during the annual convention of the National Automobile Dealers Association this week, Toyota’s Project ETA aims to make the delivery process more transparent. Among other things, it will provide dealers and shoppers with more accurate information — and alert them if there have been delays.
“Once COVID hit and the inventories became tighter, it became more and more apparent to us that we need to shore up our order-to-delivery ETA processes,” Keith Robertson, Toyota’s group vice president responsible for North American supply chain management, told Automotive News.
Consumers have long had the ability to pre-order vehicles, especially those with unusual colors and option combinations. But the vast majority of American buyers simply opted for whatever they could find on the dealer lot.
More buyers plan to pre-order
COVID and the semiconductor shortage have changed all that. About 41% of those who responded to a new survey by Cars.com said they plan to pre-order when buying their next vehicle. That’s in line with what automakers already are seeing, according to a number of officials TheDetroitBureau.com has spoken with in recent months.
In some cases, motorists are simply ordering vehicles that may already be on their way to a dealership. Others are starting from scratch, placing orders for vehicles yet to be built. And there things can get complicated. Automakers often try to “batch” production, grouping similar products to be built at the same time. That can be determined by body style, paint color, powertrain or options. And that can impact when a customer order is produced by a matter of days or even weeks.
Then there’s the delivery process which will add even more time to the process. When the cargo carrier Felicity Ace sank off the Azores last week some of the nearly 4,000 vehicles onboard had been ordered by U.S. customers during autumn 2021. That’s an unusually long wait but it routinely requires a month for deliveries from Europe to reach the U.S. and eight weeks from Asia, according to industry planners.
Unexpected disruptions
As the loss of the Felicity Ace underscored, there can be all manner of disruptions in the supply chain
“I don’t care if it’s a railhead that doesn’t have employees because of COVID, or it’s a supplier that can’t supply a part that stops a line, or all the different things that go along with that,” Danny Wilson, head of the Toyota National Dealer Advisory Council told Automotive News.
“It would be great to have some transparency so that we could tell a customer that their vehicle was going to be here in two weeks, or 10 days, or four months, whatever, but be able to update them when something changes.”
Toyota is one of several automakers who have either launched or are developing tracking systems. What was then Chrysler Corp. launched a primitive version back in 2011. Porsche allows buyers track the progress of their 911 using an app. In January, General Motors launched a tracking program for the Chevrolet Corvette which has a nearly yearlong waiting list. The automaker’s VINView system provides some tracking information for its other product lines. Volkswagen and Mercedes have been working on tracking programs of their own.
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