Why did they wait until 1943 to declare total war? Wasn't this is a bit too late in the war to do so?

The Germans were on war economic footing since the late 1930s, with the real constraint being the lack of crucial raw materials. The reason why everyone -thinks- that they only went on war footing in 1943 is 1) Because of Albert Speer's memoir, in which he gave credit to -himself- for rationalizing the Nazi economy production even though the changes he made were highly questionable. And 2) Goebbels "Total War" Speech after Stalingrad which, while important in terms of propaganda, was just that: propaganda. The actual change in production process is, again, questionable.

Tooze in Wages of Destruction proposes that the "Total War" and "War-footing" was as much propaganda as fact, and the production process in fact was adapting itself to sell a story to the German people, the idea that ever increasing production of weapons was going to turn the tide of the war. What was left out was in fact the quality of the weapons were doubtful in many cases. Tooze specifically cites the increase in production of the bf-109 fighter which was obsolete by late 1944, but was easier to produce than the alternatives and therefore generated very impressive production statistics. In reality the increase in production of certain areas was done so through reallocation of resources from other areas in a process which was quite common to the German war economy pre-1943.