Toyota and Honda positive on profit due to price increases

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Despite the chip shortage, Toyota and Honda have a positive outlook for 2022, Reuters said. The Japanese car makers would, among other things, benefit from the scarcity in the car market, which means that they can charge a higher price than usual.

Because we can indeed speak of scarcity on the car market. The demand in the automotive world is simply greater than the supply, due to a combination of a strikingly high demand and the ongoing shortage of the chips needed to build the cars.

According to Reuters, this will also lead to reduced production at Toyota and Honda in the coming year. For example, Toyota has already adjusted its previous target of 9 million units to 8.5 million units, while Honda now assumes 4.2 instead of 4.85 million cars.

Still, the two largest Japanese manufacturers are positive about the coming 12 months, because it is precisely these shortages that ensure that more can be asked for a car. Higher prices mean more profit margin, so enough can be earned with fewer cars.

This does not necessarily mean that the prices on the price list are going up, although we have seen that happen recently. In the case of Honda and Toyota, it seems to be mainly about the reduction or even disappearance of discounts, which were normal until recently, especially in the North American car market. Instead of less, more is often asked there than the recommended retail price, for the simple reason that there are also enough buyers for that higher price. Prices are also higher in Europe.

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