Automakers betting on Trump infrastructure rebuilding, says Jim Lentz

Toyota North America CEO Jim Lentz

Automakers could be betting on a possible increase in demand from a new federal facilities program to boost sinking sales and clear inventories of vehicles, the head of Toyota Motor’s North American operations stated.

Toyota North America CEO Jim Lentz told press reporters at a briefing that demand for brand-new vehicles and light trucks in the United States is slowing, and he projected sales of 17 million to 17.2 million vehicles this year, below a record 17.55 million vehicles in 2016. Stocks of some vehicles are high, and Lentz said he does not think existing levels of discounting are sustainable.

“I will take 17 million all day,” Lentz stated, during an event to mark the $154 million expansion of Toyota’s technical center located near Ann Arbor, Michigan.

Lentz stated the possibility that Donald Trump could get congressional approval of his proposed $1 trillion infrastructure rebuilding plan could be motivating car manufacturers to keep higher than regular inventories, in anticipation that the federal costs will equate into strong sales of trucks and other vehicles.

“If you get a $1 trillion stimulus, that could add 800,000 units,” Lentz stated. “That’s one factor everyone is on the accelerator” aiming to preserve demand.

Car manufacturers soon should choose “when is it sensible to take off the accelerator,” Lentz stated. Toyota inventories are at about 68 days’ supply, he informed, lower than the levels at Detroit automakers General Motors and Ford Motor.

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