Toyota cuts September production by 40% over global chip shortage

Toyota Motors is slated to cut down its global production for September by 40 per cent from what the Japanese automaker had previously planned for the month.

Previously, Toyota Motors had planned to produce little under 9 lakh automobiles during September. However, it has now revised its plans for September. According to a Nikkei Asia report, the automobile giant has reduced its global production to about 5 lakh units for September due to the ongoing global chip shortage, which has negatively affected supply chains,

Microchips have been in short supply since the end of the last year due to the impact of the COVID-19 pandemic. When the pandemic hit in early 2020, automobile manufacturers had scaled back orders, while the chipmakers had focused their output on consumer electronics as people needed more devices to deal with staying at home during lockdowns. This left automobile manufacturers in a tight spot as demand for vehicles picked up again.

The outbreak of the Delta variant of the coronavirus across Southeast Asia has also impacted the automaker's procurement process for auto parts, according to the report.

Starting early next month, Toyota Motors will temporarily suspend its production lines across multiple locations in Japan as it has decided to cut down global production by about 3.5 lakh units in September. This would include Toyota Motor's Takaoka plant, which is located in the Aichi Prefecture of Japan.  Toyota Motors is also expected to scale back production in North America, China and Europe by tens of thousands of units.

This revision means that Toyota will produce significantly fewer units in September 2021, compared to the same month last year. In September 2020, Toyota Motors managed to produce 8.4 lakh units as demand for automobiles began to recover from the initial stages of the COVID-19 pandemic.

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