TOYOTA is forecasting vehicle production to exceed pre-pandemic levels, estimating that output may be as high as 10.6 million vehicles during 2023, but it has tempered that with the warning that final shipments could be 10 per cent lower if it continues to encounter parts supply issues.

The new target is a significant jump from the planned 9.2m vehicles that it forecasts for the fiscal year through March. In 2019, Toyota made 9.05 million vehicles.

As the world’s top car manufacturer, its predictions are seen as a bellwether for the rest of the global automobile industry and its suppliers.

Toyota’s optimism is shared with Volkswagen Group that last week said it expects supply bottlenecks to ease and that based on an increase in orders, was confident for 2023.

Parts shortages attributed to COVID-related lockdowns have interrupted global production which has come on top of rising costs for materials and logistics.

In a statement issued this week, Toyota said: “Currently, we are working toward a production volume with a ceiling of 10.6 million units for 2023” and said there was “a “downward risk fluctuation range of approximately 10 per cent.”

Despite predicting a recovery last year, the company had to lower its production outlook for the current period in November, citing a persistent lack of chips.

A report from Automotive News Europe quoted Bloomberg Intelligence analyst Tatsuo Yoshida as saying: “As Toyota says, this outlook takes into consideration downside risks due to parts procurement.”

“The target of 10.6m vehicles reflects a clear and strong desire by Toyota to reach that goal.”

Underscoring the chip shortage, Toyota temporarily gave new car buyers just one smart key instead of two late last year, seeking to ration semiconductors.

The measure applied to 14 models for sale in Japan, including Crown sedans, Prius hybrids and the full-electric bZ4X.

“The situation this year remains difficult to predict due to factors such as semiconductor shortages and the spread of COVID-19,” Toyota said.

Volkswagen has publicly said that it predicts a difficult year in 2023 because of the ongoing chip shortage.

In 2022, its sales dropped by 6.8 per cent – to 4.56 million units – over 2021 which was attributed to “persistent supply shortages.”

But despite the challenging circumstances, Volkswagen’s electric vehicle (EV) sales saw a strong 23.6 per cent increase on the previous year to reach 330,000 units.

The ID 4 crossover model was a major contributor to this growth, with 170,000 global deliveries in 2022 and the title of best-selling car in Sweden for the second consecutive year, recording 8900 deliveries.

In addition, Volkswagen’s EV sales in China more than doubled, with 143,100 sales for the ID 4 and the China-only ID 6 SUV.

Volkswagen’s EV sales are expected to see a significant boost in 2023 with the launch of the upgraded ID 3, the new ID 7 saloon, and the ID Buzz MPV.

It then plans 10 new EVs by 2026 ranging from an entry-level car at under $A40,000 through to the flagship ID 7.

By Neil Dowling