Toyota Wants Dealers To Push Other Models Because It Cannot Build Enough of Its Bestseller
Toyota’s RAV4 has become one of the defining vehicles of the modern US market, to the point where the company finds itself in an unusual position. Demand is so strong that Toyota dealers are encouraging customers to switch to less popular models; This is not because interest has decreased, but because the supply cannot keep up.
The pressure increased further as Toyota switched production of the next-generation RAV4 to multiple factories. The redesigned RAV4 debuts in 2025, and incremental changes required to build the next generation across multiple facilities in Kentucky, Ontario and Japan are expected to limit early availability. Even before this change, the RAV4 was operating near the ceiling of Toyota’s production capacity.
Simply put, Toyota faces the problem of demand exceeding supply. The answer is not to cool the market, but to rebalance the showroom.
At the meeting held during the National Automobile Dealers Association event in Las Vegas, Toyota Motor North America executive David Christ had a clear message. If RAV4 stock remains limited, dealers will need to make up some of the shortfall by selling other vehicles in the Toyota lineup.
Toyota and Lexus are operating with relatively thin inventories, and there is little indication that conditions will return to normal quickly. Christ noted that much of Toyota’s current stock is concentrated in pickup trucks, giving the brand more breathing room in that part of the portfolio. But passenger cars and crossovers remain a more uncertain picture, which will depend on how the year develops.
This type of restriction has real-world impact at the dealership level. When a model in high demand becomes scarce, pricing pressure often shifts from manufacturer strategy to retailer behavior.
Limited availability has already caused some troubling side effects. Some dealers have reportedly added markups to the new RAV4, in some cases several thousand dollars above the manufacturer’s suggested price.
This approach risks damaging the reputation the RAV4 has built over the years. Part of the model’s appeal has always been its rational value proposition: strong resale, proven reliability and a practical package that makes sense for a wide range of households. When shoppers see a mainstream compact SUV priced like a premium product, it can erode trust and push buyers to competitors.
Toyota doesn’t directly control every dealer pricing decision, but the long-term strength of the brand depends on keeping key models consistent with its image in the market.
