Saturday, December 4, 2021

Toyota shortage of parts, COVID . but cut the November outlook by 15%

Toyota cut its global car production target for November by about 15% from earlier plans as parts shortages continue at the world’s largest automaker.

The Japanese company initially planned to make one million cars next month, but now expects to make only 850,000 to 900,000 cars.

“Since we still face some parts shortages and will be unable to meet previous production shortfalls, we have adjusted our initial production plans for November,” Toyota said. “This adjustment will affect approximately 50,000 units in Japan, and between 50,000 and 100,000 units overseas.”

Toyota’s full-year production target of 9 million vehicles for the 12 months ending March 31, 2022 will be retained, however, “due to the easing of restrictions on Covid-19 in Southeast Asia.” Lower-than-expected production cuts in September and October also helped.

“The worst is over,” Kazunari Kumakura, chief executive of Toyota’s purchasing group, told a media briefing. “We are seeing less risk,” he said, although as chip supply normalises, supply and demand will remain tight.

Toyota, which has long been acclaimed as one of the best in the business due to its timely supply chain, has been in a bad shape over the past few weeks. Last month, it said power shortages in China were affecting production and it could not provide further visibility as the situation was “still in flux.”

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Earlier in September, Toyota cut its production outlook for this year by about 3% as the spread of the coronavirus in Southeast Asia was disrupting access to semiconductors and other key parts. And this week, supplier Nippon Steel sought an injunction against the automaker to stop manufacturing and selling electric and hybrid vehicles that use a type of steel critical to motor performance.

“In response to the continued shortage of certain parts, we will continue our efforts to strengthen our supply chain,” Toyota said on Friday. “We will fully implement anti-Covid measures both at our own plants and at our suppliers, and since we expect semiconductor shortages to continue for a long time, we will consider the use of alternatives where possible. “

Bloomberg Intelligence analyst Tatsuo Yoshida said November’s trim was not too surprising given the environment.

Toyota “was aiming for a very ambitious recovery, but production will not be as much as originally planned,” he said. “Parts shortages and China’s power shortage still pose risks.”

Toyota shares closed up 0.4% on Friday. They are up 25% this year.

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