TOKYO — Toyota will cut global production again next month — by 330,000 units — as the pandemic and global shortage of auto chips continue to loom.
The total success represents a 40% reduction from Toyota’s original production plan in October.
Announcing the reversal on Friday, Toyota said it would also take a bigger hit than expected in September. Toyota expects to shed another 70,000 units this month.
The adjustment comes on top of an August announcement, when Toyota warned it would lose 360,000 production vehicles worldwide in September, including some 80,000 units in North America.
Contrary to last month’s announcement, when Toyota kept its global production target for the fiscal year unchanged, Toyota said this time it would lower its target to 9 million units for the fiscal year ending March 31. 2022. It had previously planned to manufacture 9.3 million vehicles. worldwide.
This total only covers Toyota and Lexus production, not Daihatsu or Hino.
In October, Toyota said it would lose a total of 330,000 vehicles from its original plan to manufacture 880,000 worldwide. Some 180,000 units will be lost at factories overseas, while Toyota’s domestic plants in Japan will produce 150,000 fewer for the month.
Toyota’s global purchasing manager Kazunari Kumakura declined to give a regional breakdown of the overseas impact.
Kumakura blamed the slowdown on supply chain bottlenecks triggered by ongoing lockdowns in Southeast Asia, where factories are suspending operations amid ongoing COVID-19 outbreaks. He said the impact in Malaysia was the worst, but also cited Vietnam as a hotspot.
A range of parts, including semiconductors and wiring harnesses, are in short supply.
Kumakura said it was still too early to give recovery prospects.
“Operations are slowly resuming but it will still take time to produce finished parts,” Kumakura said. “We can’t say for sure when we can see a rebound.”
In a statement, Toyota appeared to suggest that business may normalize somewhat from November.
“Although the outlook for November and beyond is unclear, current demand remains very strong. Accordingly, the production plan for November and beyond assumes that the previous plan will be maintained,” he said. said, warning that things are still changing. “We are continuing to evaluate production scheduled for October and will announce additional details in mid-September.”
Despite the battered production plan, chief financial officer Kenta Kon said Toyota would keep its operating profit forecast unchanged for the current fiscal year. Toyota should be able to stabilize profits, despite manufacturing fewer cars, thanks to cost control and a favorable exchange rate, he said.
Toyota had largely baffled the industry by ramping up production and making record profits despite the double whammy of the microchip pandemic.
During the company’s first fiscal quarter that ended June 30, the automaker reported record quarterly operating profit as well as record first-quarter fiscal results for net profit, revenue and sales in global retail. But he surprised last month by warning of steep production cuts for September in virtually every major market.