Toyota Cuts its Annual Production Target by 300,000 Vehicles Due to Semiconductor Shortages
Virtually all of the world's automakers have faced chip shortages since late last year. The ongoing shortages have resulted in production shutdowns in factories around the world, meaning that automakers will build far fewer vehicles in 2021 than planned.
Japan's Toyota Motor Corp. announced revised vehicle production plans for September and said it is reviewing its production plans for October due to part shortages. The company said the shortages are compounded by the spread of COVID-19 in Southeast Asia that shut down supplier factories.
"We sincerely apologize to our customers and suppliers for any inconvenience that may be caused by these changes," Toyota wrote in a press release.
The global production volume affected by these adjustments will be approximately 70,000 units (40,000 units overseas and 30,000 units in Japan) for September and 330,000 units (180,000 units overseas and 150,000 units in Japan) for October, compared to the revised production plans Toyota announced on August 19.
Toyota wrote that "We are continuing to assess expected production in October, and we will announce additional details in mid-September."
For the full-year production forecast for the fiscal year ending March 31, 2022, Toyota is adjusting its expected production volume to 9 million vehicles, down 300,000 from the 9.3 million units it forecasted earlier.
Toyota typically produces around 10 million vehicles a year globally.
Toyota says the outlook for November and the rest of the year is still unclear, but current demand remains very strong. As of now, Toyota assumes that its previous production plans will be maintained in November.
The automaker operates a total of 14 plants in Japan with 28 separate production lines. Nine of these plants will suspend production on various days throughout September.
According to Toyota, the key reasons for the production cuts is due to a decline in operations at several local suppliers, along with the impact of tighter semiconductor supply. Toyota said its difficult to maintain operations due to lockdowns at various locations, and is working to transfer production of key components to other regions in the interim.
"It's a combination of the coronavirus and semiconductors, but at the moment it is the coronavirus that is having the overwhelming impact," said Toyota Chief Purchasing Group Officer Kazunari Kumakura.
Toyota said it remains focused on delivering as many cars as possible to customers as quickly as its can. The automaker also said its shifting production to those models with higher demand.
Despite the possibility of producing 300,00 fewer vehicles in fiscal year 2021, Toyota is not revising its 2.5 trillion yen ($22.7 billion) operating profit forecast for the business year.
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