Toyota cuts September production amid chip crisis and resurgence of COVID

Toyota cuts September production amid chip crisis and resurgence of COVID

  • To reduce September production by 40%, or about 360,000 cars
  • Reiterates annual sales, production targets
  • Shares closed down 4.4%

Aug 19 (Reuters) – Toyota Motor Corp (7203.T) said it would cut global September production by 40% from its previous plan, becoming the latest major automaker to cut production due to a a global chip crunch, but it maintained its annual sales and production targets.

Toyota’s success in handling the chip shortage better than its rivals is due to its larger stockpile of chips under a business continuity plan adopted after the 2011 earthquake and Fukushima nuclear disaster.

The world’s largest automaker by sales volume on Thursday reiterated its global production target of 9.3 million vehicles for the year ending March, as well as its plan to sell 8.7 million cars over the period.

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“The 9.3 million worldwide production plan takes into account certain risks,” director Kazunari Kumakura told reporters. “We want to hit the numbers.”

Toyota said the September cuts affected 14 plants in Japan and overseas, and the company would cut its planned global production that month by about 360,000 vehicles.

Of these, 140,000 will be in Japanese factories, with the rest in the United States, China, Europe and other Asian countries.

Automakers around the world have cut production amid months-long chip shortages, but a resurgence of COVID-19 cases in Japan, the Philippines, Thailand, Vietnam and Malaysia – which are home to car factories and chip factories – led to tighter restrictions and deepened the crisis. Read more

Germany’s Volkswagen (VOWG_p.DE) said on Thursday it may have to cut production further and expects third-quarter chip supply to be “very volatile and tight.” Read more

Ford Motor Co (FN) announced Wednesday that it will temporarily close its Kansas City assembly plant that builds its best-selling F-150 pickup truck due to a shortage of semiconductor-related parts due to the increase in cases in Malaysia. Read more

Earlier this month, Toyota reported an unpredictable business environment due to new COVID-19 cases in emerging economies, semiconductor shortages and soaring material prices. Read more

Shares of Toyota closed 4.4% lower in their biggest daily decline since December 2018, taking the benchmark Nikkei average (.N225) to a seven-month low.

The automaker had already halted assembly lines at some Japanese factories between late July and early August, including its Tahara plant, due to a spike in infections in Vietnam that had limited parts supply, the report reported. Nikkei earlier.

A person familiar with the matter told Reuters this month that Toyota had also suspended production at an assembly line in Guangzhou, China, which it operates with Chinese partner Guangzhou Automobile Group Co Ltd (601238.SS) .

Also in Thailand, Toyota suspended production last month at three plants due to a pandemic-related parts shortage. Read more

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Reporting by Jahnavi Nidumolu in Bengaluru, Maki Shiraki and Ritsuko Ando in Tokyo; Written by Sayantani Ghosh; Editing by Edwina Gibbs, Tomasz Janowski and Kim Coghill

Our standards: The Thomson Reuters Trust Principles.