Toyota

Toyota cuts global production for the third time but says the worst is over

Toyota cuts global production for the third time but says the worst is over

TOKYO — Toyota will cut global production for the third time next month as the pandemic and global shortage of auto chips continue to bite, but the impact won’t be as painful as before and Japan’s biggest automaker finally sees signs of recovery on the horizon.

“I think we are going through the worst period,” said global purchasing manager Kazunari Kumakura.

Toyota will produce between 850,000 and 900,000 vehicles worldwide in November, the company said Friday. The total represents a 15% reduction from Toyota’s revised production plan in November to produce 1 million vehicles during the month.

But even with the reduction, the reduced production level still represents a record high for the month of November, Toyota said. Indeed, in August, Toyota actually raised the November monthly target to 1 million units in a bid to make up for earlier setbacks.

Purchasing manager Kumakura said the company could have reached 1 million units in November had it not been for the lingering supply chain issues.

Production in November last year, he noted, was 830,000 units.

Kumakura also predicted Toyota’s production would recover from December, and he said Toyota will do its best to make up lost volume later in the fiscal year ending March 31, 2022.

“We are now coordinating both internally and externally with our suppliers to see how well we can recover in December and beyond,” Kumakura said. “We are aiming for a high level of production for December and beyond, so we will do our best to manufacture as many vehicles as possible.”

In November, Toyota will lose about 50,000 units in Japan and between 50,000 and 100,000 units overseas, compared to the upwardly revised forecast set out in August.

While the reduction shows how supply chain rumblings continue to impact Toyota, they also show an improving reality on the ground. Toyota said it is expected to cut global production by 40% in October, after being forced to cut global production by 40% in September.

And despite the reduced production, Toyota kept its global production target for the year unchanged at 9 million units. Toyota last month lowered its target for the fiscal year to 9 million units, from 9.3 million vehicles, for the fiscal year ending March 31, 2022.

This total only covers Toyota and Lexus production, not Daihatsu or Hino.

Toyota said it was able to keep its production outlook stable because pandemic restrictions in Southeast Asia are easing and because the actual production cut that Toyota has booked so far in September and October was lower than expected.

Kumakura blamed the November slowdown on microchip shortages and supply chain bottlenecks triggered by the COVID-19 pandemic in Southeast Asia. He said Malaysia in particular remained a hotspot, but added that conditions there were improving.

Meanwhile, restrictions in Vietnam are also being lifted, he said.

“Factory operating rates are increasing in Southeast Asian countries, and we are now able to secure enough parts for normal production levels,” Kumakura said.

In Japan alone, Toyota plans to suspend operations on six of the 28 lines in November.

These closures affect four of Toyota’s 14 plants in the home country, including assembly plants that make nameplates such as the Toyota Camry, Corolla Sport, Yaris and C-HR, as well as entrances from Lexus, including the Lexus ES and NX, UX and RX sedan. crossings.

Toyota had largely baffled the industry by ramping up production and making record profits despite the double whammy of a pandemic and a microchip shortage. But over the summer, Toyota finally succumbed to the global slowdown and joined rivals in cutting production.

Toyota declined to say how the dented production could impact its profit and revenue forecast. The company announces its results for the July-September quarter in early November.