Toyota Motor Corp. lowered its annual production target to 300,000 vehicles Friday due to rising COVID-19 infection rates at parts factories in Vietnam, Malaysia which has added to a global shortage for auto chips.
After the company revised its production targets, Kazunari Kumakura, an executive from the world's largest car manufacturer, stated that "it's a mixture of the coronavirus, semiconductors, but at this moment it's the coronavirus which is having the overwhelming effect."
Toyota was able to continue production, unlike other global automakers who were forced to cut back earlier. This was because it had key components in stock along a supply chain that had been hardened against disruptions following the 2011 earthquake in northeast Japan.
The announcement by Japanese carmakers on Friday shows that not all parts of the global auto industry have been spared the effects of a pandemic. This has reduced sales and hindered their ability to profit from the recovery of demand that came after the initial waves COVID-19.
China's August car sales fell almost five percent from last year because there were fewer cars for sale.
Toyota now anticipates that it will build 9 million vehicles this year, rather than 9.3 million. The forecast of operating profits for the business year at 2.5 trillion yen ($22.7 million) was not revised by Toyota.
Toyota announced Friday that it would reduce its worldwide production by another 70,000 vehicles this month, and 330,000 in October. This is in addition to the 360,000 vehicles lost in September. It plans to make up some production lost before the year's end.
The pandemic has seen a spike in demand for chips as electronic companies rush to satisfy the stay-at-home demand of their tablets, smartphones and other devices.
Toyota's reliance on parts from Southeast Asian factories is a problem, as well as its competitors. They have had to deal with what Volkswagen AG (VOWG_p.DE), has called "very volatile" and "tight" chip supplies.
German carmaker Volkswagen has indicated that it might have to reduce production even further. Ford Motor Co. shut down production at the Kansas plant that produces its F-150 pickup. Parts shortages caused by France RenaultSA (RENA.PA), forced Ford Motor Co to suspend partial production at Spanish factories.
Daimler, a German luxury carmaker, said this month that it anticipates chip shortages to substantially lower third quarter sales.
(Source:www.economictimes.com)
After the company revised its production targets, Kazunari Kumakura, an executive from the world's largest car manufacturer, stated that "it's a mixture of the coronavirus, semiconductors, but at this moment it's the coronavirus which is having the overwhelming effect."
Toyota was able to continue production, unlike other global automakers who were forced to cut back earlier. This was because it had key components in stock along a supply chain that had been hardened against disruptions following the 2011 earthquake in northeast Japan.
The announcement by Japanese carmakers on Friday shows that not all parts of the global auto industry have been spared the effects of a pandemic. This has reduced sales and hindered their ability to profit from the recovery of demand that came after the initial waves COVID-19.
China's August car sales fell almost five percent from last year because there were fewer cars for sale.
Toyota now anticipates that it will build 9 million vehicles this year, rather than 9.3 million. The forecast of operating profits for the business year at 2.5 trillion yen ($22.7 million) was not revised by Toyota.
Toyota announced Friday that it would reduce its worldwide production by another 70,000 vehicles this month, and 330,000 in October. This is in addition to the 360,000 vehicles lost in September. It plans to make up some production lost before the year's end.
The pandemic has seen a spike in demand for chips as electronic companies rush to satisfy the stay-at-home demand of their tablets, smartphones and other devices.
Toyota's reliance on parts from Southeast Asian factories is a problem, as well as its competitors. They have had to deal with what Volkswagen AG (VOWG_p.DE), has called "very volatile" and "tight" chip supplies.
German carmaker Volkswagen has indicated that it might have to reduce production even further. Ford Motor Co. shut down production at the Kansas plant that produces its F-150 pickup. Parts shortages caused by France RenaultSA (RENA.PA), forced Ford Motor Co to suspend partial production at Spanish factories.
Daimler, a German luxury carmaker, said this month that it anticipates chip shortages to substantially lower third quarter sales.
(Source:www.economictimes.com)
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