Toyota Motor cuts 2021-22 vehicle output on chip shortage, COVID-19

Japan’s Toyota Motor Corp has cut its full-year production outlook as a global semiconductor chip shortage and higher COVID-19 cases in Southeast Asia prompt it to lower output by 400,000 vehicles over September and October, the company said Sept. 10.

Toyota lowered its production forecast for the fiscal year ending March 31, 2022, to 9 million vehicles from an earlier projection of 9.30 million vehicles, the company said.

The company in a statement attributed the cuts to “a decline in operations at several local suppliers due to the prolonged spread of COVID-19 in Southeast Asia and the impact of tighter semiconductor supplies.”

The latest cuts come on top of an earlier plan to close 27 of its 28 vehicle production lines at 14 factories in Japan between Aug. 24 and Sept. 30. The reduction will affect 10 additional manufacturing lines at nine of its Japanese plants, reducing demand for automotive steel, as production of 70,000 vehicles will be lost in September, and 330,000 vehicles in October.

“We are continuing to assess expected production in October, and we will announce additional details in mid-September,” Toyota said. “Although the outlook for November and beyond is unclear, current demand remains very strong. As a result, the production plan for November and beyond assumes that the previous plan will be maintained.”

Around 30% of Japanese automakers’ factories are located in ASEAN countries, data from the Japan Auto Parts Industries Association showed.

Source: Toyota Motor Corp.

— Clement Choo