“It feels like the microchip, the whole semiconductor issue, it feels like it’s going to take forever. Just to be candid, it feels like this problem is here to stay,” he said, explaining that as automakers expand their lineups to include more electronic-intensive electric vehicles and grow their sales, demand for microchips will increase.
“Can we ever get to a point where we’re really producing microchips at a speed that’s that much faster than the industry is growing?” Hollis said rhetorically. “So the problem stays with us for a lot longer than we might have expected originally.”
In other comments, Hollis said that rapidly rising interest rates “are certainly not helping” Toyota and other automakers in the U.S. as the inflation-fighting hikes made by the Federal Reserve drive up both the cost of funds and the viability of leasing.
“What has happened with interest rates has been more about what it does to the psyche of everybody kind of waiting for something,” Hollis said. “When you don’t know exactly how high interest rates are going to go, people have to stop and pause and see where it’s going.
“In the short term, we’re still seeing waiting lists for new vehicles, and we still see super-low inventory and low incentives, so the impact [of rising interest rates] has been negligible,” he said. “But what you’re hearing and what you’re starting to see in the used-car price decreases, you’re starting to see people slow up a little bit.”
