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 U.S. market, to the point that the company has found itself in an unusual position. Demand is so strong that Toyota is encouraging dealers to steer shoppers toward less popular models, not because interest is fading, but because supply cannot keep up.

The pressure has intensified as Toyota transitions production of the next generation RAV4 across multiple plants. The redesigned RAV4 was revealed in 2025, and the staggered changeovers needed to build the next generation across multiple plants in Kentucky, Ontario, and Japan are expected to constrain early availability. Even before that changeover, the RAV4 was already operating near the ceiling of Toyota’s production capacity.

In simple terms, Toyota is facing a textbook problem of demand outpacing supply. The response is not to cool the market but to rebalance the showroom.

At a meeting held during the National Automobile Dealers Association event in Las Vegas, Toyota Motor North America executive David Christ delivered a clear message. If RAV4 inventory remains tight, dealers will need to make up part of that shortfall by selling other vehicles in Toyota’s lineup.

Toyota and Lexus have been operating with relatively lean inventories, and there is little indication that conditions will normalize quickly. Christ noted that a large share of Toyota’s available stock is concentrated in pickup trucks, which gives the brand more breathing room in that part of the portfolio. Passenger cars and crossovers, however, remain a more uncertain picture that will depend on how the year develops.

This kind of constraint has a real-world effect at the dealership level. When a high-demand model becomes scarce, pricing pressure often shifts from manufacturer strategy to retailer behavior.

Limited availability has already produced some uncomfortable side effects. Some dealers have reportedly added markups to the new RAV4, in some cases several thousand dollars above the manufacturer’s suggested price.

That approach risks undermining the reputation the RAV4 has built over 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 damage trust and push buyers to competitors.

Toyota does not directly control every dealer pricing decision, but the brand’s long-term strength depends on keeping core models aligned with their image in the market.