For Toyota and its Lexus brand, this December could be one to remember — for all the wrong reasons.
Ongoing microchip and other supply chain shortages caused by the pandemic have forced Toyota Motor Corp. to continue to cut its global production. Meanwhile, U.S. retail demand for new vehicles has slowed, but not yet enough to repopulate empty dealership lots.
That's left Toyota Motor North America executives with a conundrum: Do they still hold their traditional end-of-year sell-offs — and spend the requisite marketing money — if their dealers don't have any inventory to sell off?
The answer is probably, but top leaders at the company admit that they are couching that answer in a prayer that their production woes will begin to get better soon.
"I'm optimistic the inventory situation will start to change for the better," said Jack Hollis, senior vice president for automotive operations at Toyota Motor North America. "With a little luck, December will be the turning point, and while we don't want to over-promise, it may allow us to carry forward much of our marketing and creative as planned."
For decades, Lexus and Toyota have finished their calendar years with big sales events to clear away the last model-year inventory. December to Remember and Toyotathon have become so ingrained in popular culture that outside companies now sell Lexus' big red bows, and the promotion was skewered by "Saturday Night Live" in 2020.
"I think we're still going to do it, I just think what we do [this year] will be less," Andrew Gilleland, head of the Lexus Division, told Automotive News last week. "We're still going to have cars available, it's just not going to be our typical 15 to 30 days' supply; it might be more 10 to 12 days'."
Vinay Shahani, who heads Lexus marketing, said the annual December to Remember sale is too important to the brand's DNA not to do it, despite a lack of inventory.
"I've had dealers tell me that their sales reps plan their vacations around December to Remember," Shahani said.