Toyota cuts production target by 3% on parts and chips shortages

Business

Johannesburg – Toyota Motor Corp cut its annual production target by 300,000 vehicles on Friday as rising Covid-19 infections slowed output at parts factories in Vietnam and Malaysia, compounding a global shortage of auto chips.

“It’s a combination of the coronavirus and semiconductors, but at the moment it is the coronavirus that is having the overwhelming impact,” said Kazunari Kumakura, an executive at the world’s biggest car maker, following the company revising its production target.

Toyota had managed to avoid cuts to output because it had stockpiled key components along supply chain hardened against disruption after northeast Japan’s devastating earthquake in 2011.

The carmaker’s announcement on Friday is a further sign that no part of the global car industry has escaped the affects of a pandemic that has sapped sales and is hobbling their ability to take advantage of the recovery in demand that followed the initial waves of Covid-19.

Toyota expects to build 9 million vehicles in the year to March 31, rather than 9.3 million. It did not revise its 2.5 trillion yen operating profit forecast for the business year.

Adding to a 360,000 vehicle cut in worldwide production in September, the company said on Friday it will reduce output by a further 70,000 this month and by 330,000 in October. It hopes to make up for some of that lost production before its year-end.

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