Despite Curbing November Production, Japan’s Toyota Holds On To Its Full-Year Target

The ongoing global chip shortage has forced Japan’s Toyota Motor Corp to reduce its planned global production output for November by as much as 15 per cent on Friday.

The company however hinted that it would increase production in December while it held on top its latest production target for the entire year.

Toyota would reduce the number of cars it makes globally by between 100,000 and 150,000 in November compared to what it had planned earlier for the month when it had predicted a rebound in output, Japan’s largest automaker said in a press release.

Toyota had to cut its production target for the year to March 31 by 300,000 vehicles after supplies of components from its factories in Malaysia and Vietnam slowed down due to an increase Covid-19 infections in those countries, forcing Toyota to cut its production target for the year to March 31 by 300,000 vehicles to 9 million vehicles.

That forecast by the company was reiterated by it on Friday, implying that it will have to increase output for the rest of the year and depend on a drop in Covid-19 infection rates in Southeast Asia which will allow chip factories to increase their output.

“I can’t predict what is going to happen, but I think we are through the worst period of lower production risks,” Kazunari Kumakura, an executive at the world’s biggest carmaker, said during an online briefing.

Toyota is targeting to start against its curbed production in December and is communicating with its component suppliers in Southeast Asia to enhance supplies so that the company is able to regain some of the lost production, said reports quoting sources familiar with the company’s plans.

According to a Toyota spokesperson, the total cut down in output from September to November will be as much as 910,000 vehicles.

In November, the cut down in production in North America will be between 45,000 and 55,000 vehicles.

After a major earthquake struck Japan’s northeast coast in 2011, the Japanese automaker, which had hedged its supply chain against disruptions, was the last of the major global automakers to cut production due to parts shortages.

Because there were fewer vehicles for customer to purchase, car sales in China dropped by a fifth in September compared to the same month last year.

The pandemic has sparked stay-at-home demand for tablets and other electronic devices, which has exacerbated the global semiconductor shortages.

According to Kumakura, the company is still experiencing strength in demand for its cars from around the world and hence it plans to ramp up its output in December after the November curtailment.

(Adapted from Reuters.com)



Categories: Economy & Finance, Regulations & Legal, Strategy, Sustainability, Uncategorized

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