Toyota to Cut November Production 15% Amid Chip Shortages
Toyota said on Friday that it would cut November production targets at home and abroad by as much as 15 percent as the pandemic and a global semiconductor shortage have made it difficult for the Japanese automaker to meet its short-term manufacturing goals.
Automakers worldwide have struggled to keep up with rebounding demand for their vehicles as pandemic restrictions in the world’s largest auto markets ease and consumers look to make up for lost time. The European Automobile Manufacturers’ Association said Friday that new car registrations in September were down 25 percent from a year earlier, largely because dealers don’t have enough cars to sell because of a shortage of semiconductors.
The global shortage of semiconductors — caused by such factors as supply chain woes and surging sales of home electronics during lockdowns — has hit the automotive industry hard, with Volkswagen reporting a 28 percent decline for September, the European manufacturers association said. Many automakers reduced orders for parts last year because of uncertainty about the pandemic’s effect on sales, and they are now struggling to source new components.
Other industry players have announced cutbacks in their manufacturing plans as a result, but Toyota, which had stockpiled chips, was able to hold out longer than its competitors.
In September, however, Toyota announced substantial cuts to its production targets for September and October, citing the lack of semiconductors and difficulties obtaining parts from suppliers in Southeast Asia hit by the coronavirus.
Toyota had initially planned to produce a million vehicles in November, hoping to make up for previous production shortfalls and meet strong global demand.
But continuing difficulties obtaining supplies have forced it to change those plans. The company now projects it will make 850,000 to 900,000 vehicles next month. It made 830,000 vehicles last November.
In a statement on its website, Toyota said it still expected to meet its annual production forecast of nine million vehicles — adjusted down in September from 9.3 million — by the end of its fiscal year in March.
The company said it was considering strategies to deal with its supply chain difficulties, noting that “we expect the shortage of semiconductors to continue in the long term.”