TOKYO, Oct. 15 (BUS) – Toyota Motor Corp. (7203.T) on Friday cut its planned global production for November by up to 15% due to the ongoing shortage of chips, but indicated that it would increase production from December by sticking with it. Latest production target for the whole year.
Japan’s leading automaker said in a press release that it will produce 100,000 to 150,000 vehicles in November less than it had planned for a month, implying a rebound in lost production, Reuters reported.
The reduction follows cuts in September and October as component supplies from factories in Malaysia and Vietnam slowed due to an increase in COVID-19 infections there, forcing Toyota to lower its production target for the year ending March 31 by 300,000 vehicles to 9 million.
On Friday, the company complied with those expectations, which means it will have to ramp up production for the rest of the business year, relying on lower COVID-19 infection rates in Southeast Asia to allow chip factories to ramp up production.
“I can’t predict what will happen, but I think we are going through the worst period of low production risk,” Kazunari Kumakura, an executive at the world’s largest automaker, said during an online briefing.
Three sources familiar with the company’s plans told Reuters earlier that Toyota wants to resume reduced production in December and is asking its component suppliers in Southeast Asia to increase supplies so it can make up for some lost production.
A Toyota spokesperson said the total cut in production from September to November would amount to 910,000 vehicles.
In North America, the reduction for November will range from 45,000 to 55,000 vehicles.
The Japanese automaker, which bolstered its supply chain against disruptions after a major earthquake hit Japan’s northeastern coast in 2011, was the last major global automaker to cut production due to a shortage of spare parts even as demand for cars rebounded.
Car sales in China in September fell by a fifth from a year earlier due to a decrease in the number of cars people could buy.
In addition to forcing chip factories to close, the pandemic has fueled stay-at-home demand for tablets and other electronic devices, exacerbating a shortage of semiconductors.
Komakura said Toyota is still seeing strong demand for its vehicles, so it wants to ramp up production in December.
NS