Business Essentials for Professionals


Toyota Will Reduce Quarterly Output To Relieve Pressure On Suppliers

Toyota Will Reduce Quarterly Output To Relieve Pressure On Suppliers
Toyota Motor Corp announced on Friday that it will reduce domestic manufacturing by up to 20 % in April, May, and June to relieve pressure on suppliers dealing with chip and other part shortages.
As the Covid-19 epidemic continues on, the action by Japan's largest carmaker is the latest to highlight supply-chain issues plaguing the global auto sector. The situation has been made much more difficult by the Ukraine issue.
Toyota expects to cut domestic output by around 20 per cent in April, 10 per cent in May, and 5 per cent in June, compared to a previous production schedule, according to a spokeswoman. According to the spokeswoman, production will remain high because the prior plan factored in the need to make up for lost productivity.
Due to chip shortages, the automaker's suppliers have been forced to make a number of modifications to production schedules, and the lower output should relieve some of the pressure, according to the spokesman, who declined to elaborate on the number of cars impacted or the financial effect.
This week, Toyota President Akio Toyoda informed union members that without a solid production plan, suppliers risked getting "exhausted," and that the months of April to June would be "an purposeful cooling off."
Rivian Automotive Inc, a builder of electric vehicles in the United States, warned on Thursday that supply-chain concerns might slash its projected output in half this year, to 25,000 vehicles.
Honda Motor Co. Ltd. has announced that it will reduce output at two domestic factories by around 10 per cent through the end of this year.
Separately, after a cyberattack on a supplier, Toyota halted domestic manufacturing for one day at the start of this month, preventing the production of around 13,000 automobiles on that day.
Toyota plans to build an all-time high of 11 million cars in fiscal 2022 if it can secure a steady supply of semiconductors.
Its stock fell 4.4 per cent on Friday, lagging a 2.1 per cent drop in Tokyo's Nikkei 225 index.

Christopher J. Mitchell

Markets | Companies | M&A | Innovation | People | Management | Lifestyle | World | Misc