Toyota keeps auto sales crown, but will it need a strategy shift?
ollo/iStock Unreleased via Getty Images

Toyota (NYSE:TM) is not only defending its title as the world's top-selling automaker for a third year in a row, but it is doing so by a wide margin. Including subsidiaries Hino Motors and Daihatsu, group sales reached 10.5M vehicles in 2022, compared to the 8.3M of its second-ranked rival Volkswagen (OTCPK:VWAGY). The news comes after Toyota (TM) shocked the industry with its first CEO transition in 14 years that could indicate a stronger focus on next-generation vehicles.
Bigger picture: Despite production constraints caused by COVID-19 and increased demand for semiconductors, Toyota's (TM) total sales were in line with its figure from 2021 versus a 7% annual drop seen at VW (OTCPK:VWAGY). Pressures from poorly stocked dealerships and dwindling savings have also been seen across the globe, as well as the U.S., which just marked its worst showing for car sales in over a decade. Financing new vehicles is also growing more expensive than ever, with 15.7% of American car buyers having a record high monthly payment of more than $1,000.
In 2021, Toyota even surpassed General Motors (NYSE:GM) as the best-selling automaker in the U.S. (see how here), though it doesn't remain its long-term goal as the company sets its sights on the transformation of the auto industry. Toyota has been diversifying its portfolio into a broad range of vehicle classes, including ICE, EV, hybrid and hydrogen fuel cells, a strategy that it has continued to pursue for decades (the first Prius was released in 1997). While Toyota has recently doubled down on its all battery-electric vehicles, SA author Doron Levin says it is not moving fast enough when factoring in its global footprint, though he does like the company's dividend, which is paying a yield of nearly 3%.
Fully electric or plug-in hybrid? As the BEV or PHEV debate rages on the world stage, many are sizing up how things will play out, especially given governmental intervention (see green energy subsidies and tax breaks) and the starting lines of various automakers. SA contributor Ramy Taraboulsi flags some interesting winners in the race, even if their strategies and business models are flawed. See how he stacks up the visions of Toyota versus Tesla (NASDAQ:TSLA), as well as their core competencies and financial projections.