While Ford’s been looked at as automaker that suffered the most due to the chip shortage, others are unfortunately playing catch up. Toyota announced it’s cutting another 300,000 units from its annual production target due to the ongoing problem.
However, semiconductors aren’t the company’s only problem. A rise in COVID-19 infections by workers at parts suppliers in Vietnam and Malaysia is throttling down the flow of parts needed by the automaker .
“It’s a combination of the coronavirus and semiconductors, but at the moment it is the coronavirus that is having the overwhelming impact,” Kazunari Kumakura, Toyota’s purchasing group chief officer, said, according to Reuters.
The company is facing production losses in September and October and plants in Japan as well as in other countries are being impacted. In August, Toyota announced temporarily shut downs of 27 out of 28 production lines at 14 plants around the world due to the chip problem.
By the numbers
The global production volume affected by these adjustments will be approximately 70,000 units (40,000 units overseas and 30,000 units in Japan) for September and 330,000 units (180,000 units overseas and 150,000 units in Japan) for October, compared to the production plan as of August.
“Regarding the full-year production forecast for the fiscal year ending March 31, 2022, we are adjusting the expected volume to 9 million units due to the impact of the production cut, down from the 9.3 million units forecast,” the company said in a statement.
“Although the outlook for November and beyond is unclear, current demand remains very strong. As a result, the production plan for November and beyond assumes that the previous plan will be maintained.”
Company officials said despite the cuts, they are sticking to their most recent financial guidance, with full-year operating income expected to come in at 2.5 trillion yen, or $22.7 billion.
No end in sight
Toyota’s issues with semiconductors are shared across the industry. Initially, there was hope automakers would be able to make up some lost production in the second half of this year. However, chip suppliers aren’t able to make that happen.
Part of the reason has been the resurgence of COVID-19 in southeastern Asian countries where the chips are produced. Toyota cited it as have others and now automotive and chip executives are saying supplies won’t be back to normal until 2023.
“As the demand for semiconductors in all industries continues to increase, we are continuously assessing the situation and discussing medium- to long-term countermeasures with related companies,” the company said in a release.
“Our focus remains on doing everything we can to deliver as many cars as possible to our customers as quickly as possible, such as shifting our production plans to models with high demand.”