Toyota Finally Slashes September Production By 40% After Holding Off For Much Of The Chip Shortage Crisis
Toyota Motor Corp (NASDAQ: TM) was weathering the semiconductor shortage, even as the rest of the automotive industry took deep production cuts.
Now it appears the chip crunch and supply chain disruptions have come to haunt the Japanese auto giant as well.
Toyota Trims Target: Toyota, the second most valued automaker, is planning to reduce its global production by 40%, the Nikkei reported.
The original target of 900,000 vehicles for September has been scaled back to 500,000 units, the report added. The speculated move would mean the automakers have to idle production lines at multiple factories in Japan, starting early September.
Toyota’s production in North America, China and Europe will likely be cut by tens of thousands of units, Nikkei said.
The month of September will likely witness a year-over-year drop in production on account of the production cuts.
Related Link: The Global Chip Shortage: Worst-Hit Stocks And Industries, Potential Beneficiaries
Chip, COVID The Culprits: The global semiconductor shortage and supply chain disruptions on account of the outbreak of the delta variant of COVID-19 in Southeast Asia is responsible for the predicament, according to Nikkei.
Toyota already halted assembly lines at some factories in Japan due to the rise in COVID-19 cases in Vietnam that impacted parts supply.
Thus far, Toyota remained immune to the chip shortage, given its pivot away from “just-in-time” inventories to inventory stocking. The company learned the hard way during the 2011 Fukushima Daiichi nuclear disaster, which severely impaired its production.
With Toyota flagging the continuing supply chain issues, it remains to be seen how other automakers will cope.
Related Link: Toyota Finally Reveals Its EV Strategy
Photo: Courtesy Toyota
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