Toyota cuts annual production target as semiconductor shortage and Covid outbreaks weigh
Car giant Toyota today said that it would slash its global production target by 300,000 units as a combination of the semiconductor shortage and the coronavirus continue to hammer output.
Having already announced that it would cut production in September alone by 360,000 cars, the Japanese automaker said it would have to reduce output by another 70,000 vehicles this month.
Next month it will also cut output by 300,000 units, a 40 per cent reduction on previous output plans.
As a result, Toyota has now decided to rein in its annual targets, trimming forecasts from 9.3m to 9m.
However, the world’s largest carmaker kept estimates of profit of 2.5 trillion yen ($22.7bn) intact.
Despite the much-publicised shortage of computer chips vital for making cars, the firm said that it was labour shortages due to new Covid-19 cases that was causing the most disruption.
“It’s a combination of the coronavirus and semiconductors, but at the moment it is the coronavirus that is having the overwhelming impact,” said executive Kazunari Kumakura.
Several of the firm’s factories in south-east Asia have been forced to close as a result of the outbreaks.
Kumakura said that Malaysia was the worst hit, but Vietnam was also an issue for the firm.
In a statement, Toyota said that it expected normal production to return in November.
“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.”
It added that it would provide a further update in mid-September.