Toyota Exec Expects Average New-Car Prices to Exceed $50K in 2023
Toyota, one of the world’s largest automobile manufacturers, expects that by 2023 the average price of a new car in the United States will exceed $50,000. This forecast comes from Jack Hollis, Toyota North America’s senior vice president of automotive operations.
Hollis cited several factors for this emerging trend of rising prices for new cars. One of the key drivers, according to him, is the increased demand for SUVs and other larger vehicles. As gasoline prices have remained low and consumer preferences have shifted away from sedans and smaller cars, more and more people are buying these heftier and more expensive models.
Another factor that Hollis believes is contributing to the uptick in car prices is the intersection of technology and mobility. Modern cars are outfitted with more high-tech features than ever before, including infotainment systems, driver-assistance tools, and other forms of onboard technology. These features, while undoubtedly convenient and useful, also require significant investments of capital and research and development.
In addition, Hollis argues that the cost of materials has risen in recent years, driving up the cost of automobile production. Whether due to tariffs, supply chain disruptions, or other factors, the price of raw materials like steel and aluminum has become less predictable, and manufacturers are often forced to adapt their production processes in response to changing market conditions.
As the price of new cars continues to rise, industry experts expect that consumers will increasingly turn to the used car market. Used cars, while often more affordable than new vehicles, have their own set of challenges—including the risk of buying a lemon or dealing with costly repairs down the road. But for many buyers, the allure of a bargain-priced SUV or luxury sedan may be too good to resist.
Ultimately, the trend towards higher new car prices is likely to continue for the foreseeable future. While analysts may debate the extent to which various factors are contributing to this trend, the underlying reality is that cars are becoming more expensive, and buyers will need to adjust their expectations accordingly. Whether through innovation, regulation, or other measures, the automotive industry will need to adapt to these new market conditions in order to remain competitive and profitable.
