Toyota cuts global production for 3rd time but says worst is over
TOKYO – Toyota Motor Corp. will cut global production for the third time next month as the pandemic and the global microchip shortage continue to be felt, but the impact will not be as painful as before and Japan’s largest automaker is finally seeing signs of recovery on the horizon.
“I think we are in the worst times,” said Kazunari Kumakura, head of global purchasing.
Toyota will produce between 850,000 and 900,000 vehicles worldwide in November, the company said on Friday. The total represents a 15 percent reduction from Toyota’s revised production plan in November to produce 1 million vehicles in the month.
But even with the cut, the reduced production level is still a record high for the month of November, Toyota noted. Indeed, in August, Toyota actually raised the November monthly target to 1 million units in an effort to make up for previous setbacks.
Purchasing manager Kumakura said the company could have grown to 1 million units in November, without the lingering supply chain issues.
Production in November of last year, he noted, was 830,000 units.
Kumakura also predicted that Toyota’s production would recover from December, and he said Toyota will do everything possible to make up for lost volume later in the fiscal year ending March 31, 2022.
âWe are now coordinating both internally and externally with our suppliers to see how well we can make a recovery in December and beyond,â 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 around 50,000 units in Japan and between 50,000 and 100,000 units overseas, compared to the revised upward forecast made in August.
While the reduction shows how supply chain grunts continue to impact Toyota, they also show an improvement in the reality on the ground. Toyota said it is expected to cut global production by 40 percent in October, after being forced to cut global production by 40 percent in September.
And despite the reduced production, Toyota maintained its global production target for the year at 9 million units. Last month, Toyota lowered its target for the year to 9 million units, from 9.3 million vehicles, for the year ending March 31, 2022.
This total only covers the production of Toyota and Lexus, 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 remains a hot spot, but added that conditions have improved there.
Meanwhile, restrictions in Vietnam are also thinning, he said.
âFactory operating rates are increasing in Southeast Asian countries and we are now able to guarantee enough parts for normal production levels,â 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 factories in the home country, including assembly plants that manufacture nameplates such as the Toyota Camry, Corolla Sport, Yaris and C-HR, as well as entrances Lexus, including the Lexus ES and NX sedan, UX and RX. crosses.
Toyota had largely baffled the industry by ramping up production and making record profits despite the double blow of a pandemic and a shortage of microchips. But over the summer, Toyota finally succumbed to the global downturn and joined with its competitors in cutting production.
Toyota declined to comment on how dented production might make its profit and revenue forecast. The company announces its results for the July-September quarter in early November.