On Wednesday, Toyota Motor Corp cut back its annual production target by half a million vehicles following COVID-19 sick leaves and chip shortages crimping the company’s output.

Toyota, the world’s biggest carmaker, will build 8.5 million vehicles this year ending March 31, down from a previous estimate of 9 million. It has also posted a 21% fall in operating profit for the three months to Dec 31, 2021.

“We don’t expect the imbalance in chip supplies to resolve quickly and the course of coronavirus pandemic is unclear,” said a Toyota official. “We think that uncertainty will continue into the next business year”.

The Coronavirus-induced COVID-19 pandemic has wrecked havoc on the global automakers and has hammered their supply chains forcing automakers to cut costs in a bid to squeeze more profit per vehicle.

This effort to raise margins has been helped by robust demand in key markets including the United States, Europe and China.

Toyota is benefitting from a weaker yen which is bolstering the value of the yen in earnings from overseas markets.

The carmaker has stuck to its full-year profit forecast of $24.3 billion (2.8 trillion yen).

($1 = 115.4300 yen)

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Tags: annual, automakers, carmaker, chip shortages, chip supplies, coronavirus pandemic, COVID-19, operating profit, production target, profit forecast, sick leaves, supply chains, Toyota Motor Corp, vehicles