Intensified chip shortage Toyota will cut production by 40%


Toyota Motor Corporation Update

Toyota, the world’s largest automaker, warned that after a wave of coronavirus cases in Southeast Asia has exacerbated chip shortages in the automotive industry, the company will cut its global production by 40% in September.

The Japanese group said on Thursday that it will produce 540,000 vehicles next month, down from the original plan of 900,000 vehicles.

Almost all of its factories in Japan will be hit, and 27 production lines will be disrupted. The production of the company’s global operations will be hindered, with plants in North America and China each designated to deliver 80,000 cars less than expected. In Europe, production will be reduced by 40,000 vehicles from the original plan.

Toyota executives said the sudden surge in coronavirus cases in Vietnam and Malaysia has exacerbated the semiconductor shortage and left the group lacking other auto parts for its global network.

These two countries play a key role in the production of electronic products and packaging and testing components, which are used in everything from automobiles to smartphones. Toyota’s largest manufacturing center in Southeast Asia is Thailand, which is also struggling with a record number of Covid -19 cases and production cuts.

Toyota’s head of global procurement, Kazunari Kumakura, said: “It is difficult to ensure the necessary quantity of several parts, which led to this sudden large-scale reduction in production.”

The layoffs were a major setback for the Japanese company, which has managed to barely maintain Record profit Despite the pandemic and chip shortages, this has hit some competitors even harder.

Affected by this news, Toyota’s share price fell 4.4%, which was first reported by the Nikkei.

So far, Toyota has succeeded in getting rid of the most serious shortage with its large chip inventory and supply chain management skills honed in past natural disasters.

The automaker declined to comment on which parts are facing shortages. However, the company stated that it has taken production cuts into account and adhered to its guidelines for global production of 9.3 million vehicles in the fiscal year ending in March.

Before Toyota’s move, Chinese automaker Geely also warned this week that due to the chip crisis, production will continue to be “uncertainty.” Jaguar Land Rover halved its sales forecast last month, blaming it for a lack of semiconductors.



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