Toyota reduces production again due to a shortage of parts and chips

TOKYO — Toyota Motor Corp. plans to reduce global production by 330,000 units next month as the global pandemic of microchip shortages and car-related deaths continue.

This total reduction of 40% is compared to Toyota’s October production plan.

Toyota announced the reverse on Friday and said that it would also suffer a larger loss than was anticipated in September. Toyota anticipates that it will lose an additional 70,000 units in September.

This adjustment follows an August announcement by Toyota, in which it warned that 360,000 cars of global production would be lost in September.

This brings the September total loss at 430,000 vehicles.

Toyota announced this month that, unlike last month’s announcement where Toyota maintained its global fiscal year production goal, it will lower its target to 9,000,000 units in fiscal 2022. Toyota had previously planned to produce 9.3 million vehicles around the world.

This total includes output from Toyota and Lexus only, not Hino or Daihatsu.

Toyota announced that it will lose 330,000 cars from the original goal of 880,000 worldwide in October. Outsourcing factories will lose around 180,000 vehicles, and Toyota’s Japanese plants produce 150,000 less units per month.

Kazunari Kumakura (Taylor’s global procurement manager), declined to provide a breakdown of the regional impact for overseas.

Kumakura attributed the slowdown to supply chain bottlenecks caused by continued lockdowns in Southeast Asia. These are where factories have been forced to suspend operations due to ongoing outbreaks of COVID-19. Kumakura said that Malaysia had suffered the most severe effects, while citing Vietnam as another trouble spot.

There are a variety of parts available, including wire harnesses and semiconductors.

Kumakura stated that it was too soon to predict recovery.

Kumakura stated that operations are gradually recovering, but still it would take some time to make finished parts. We don’t know when the rebound will occur.

Toyota made a statement suggesting that business might begin to normalize from November.

Although the future outlook is uncertain for November and beyond, demand continues to be strong. The production plan for November implies that the existing plan will continue, but it cautioned that there are still uncertainties. We are still evaluating the expected October production and will provide additional information in September.

Kumakura stated that Toyota would do everything possible to compensate for the volume loss later in fiscal year.

The Toyota procurement manager stated that “as far as our recovery plans are concerned, we have already prepared for high production levels in the second half this fiscal year. So we will work closely with our production department for details.” We will probably consider adding weekend shifts to our operations and revising them. “We will evaluate how much money we have to recover.”

Toyota’s CFO Kenta Kon stated that despite the deferred production plans, the company would maintain its current fiscal year operating profit forecast. He said that Toyota would be able stabilize its profits despite producing fewer vehicles due to cost control and favorable foreign exchange rates.

Kon acknowledged that production cuts could have an impact on fiscal year revenues, but said the company is maintaining its revenue outlook for the moment.

Toyota had effectively confounded the sector by increasing output and recording record profits, despite the double pandemic-microchip hammer.

The automaker posted record operating profits for the fiscal first quarter, which ended June 30. It also reported unprecedented fiscal first-quarter net income, revenue, and global retail sales results. It surprised everyone last month when it announced that September would see significant production cuts in almost every market.

Publited Sat, 11 September 2021 at 01:09:50 +0000

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