Toyota Takes Action: Lexus Sales Limited in Japan to Prioritize Allocating Chips to Toyota Vehicles

Toyota sets sales cap on all Lexus sales in Japan to fight chip shortage and re-allocate cars to other markets.

Toyota’s luxury brand Lexus has anointed itself as one of the best luxury auto brands on the market. Today, a base model Lexus provides more luxury per dollar than any other German luxury car. In fact, major automotive journalists have said that they would indeed prefer an affordable Lexus over a German automobile.

Recently, an article published by Nikkei Asia confirmed that Toyota had capped sales allocations for Lexus models in Japan to increase their chip supply for other Toyota models which will be sold domestically and abroad. According to the article, “The number of limits varies by dealership, and once they are sold out, no more orders can be taken. For example, the popular UX multi-purpose SUV was apparently allocated several dozen units per dealership, although the number varies depending on the size of the dealership.”

This is pretty significant considering that Toyota had recently announced their projected numbers for 2023. In retrospect, these numbers are attainable through the use of resources in areas where they may be needed more. For instance, why sell a cheap car in Japan, when you can use that same chip to sell an expensive SUC in America? This is pretty much what Toyota is going after and I think with significant strategic planning, we may see the price of these cars potentially drop. Granted, until something is done about dealer markups, you can still expect to pay an enormous sum.

Now the question arrives for these Japanese dealers, how many cars will they get? According to the article mentioned above, “One dealer said that many models "will take at least six months, but it could be longer." On the other hand, "Toyota brand" models such as the Corolla do not have order limits. Toyota indicates estimated delivery times from the factory for 22 of the 37 models.” This is interesting. There will be Lexus models available but Toyota models like the Corolla will be in full swing. Does this mean more expensive prices?

Japanese Lexus dealers have a cause to raise prices on Lexus models due to the low inventory but that doesn’t necessarily mean they will. You as the buyer also have power, if you can secure a brand new Lexus in Japan this year, you have to ability to flip it for a profit by reselling.

What do you think? Will Lexus find a new way to secure chips? Let us know in the comments below.

Harutiun Hareyan is reporting Toyota news at Torque News. His automotive interests and vast experience test-riding new cars give his stories a sense of authenticity and unique insights. Follow Harutiun on Twitter at @HareyanHarutiun and on YouTube at Toyota Time for daily Toyota news.