Toyota increases overseas production as output slumps in Japan

TOKYO – Toyota is increasing overseas production to offset lower output at home in Japan.

From January to June, the automaker built more cars overseas than it ever has during that period. And it capped the run by notching record overseas sales and production results for the month of June, as the automaker gradually recovers from pandemic and supply-chain woes.

The latest tallies, released on Thursday, show that Toyota still struggles in the home market, where factories have been idled by a shortage of parts.

But outside Japan, Toyota is boosting production in its factories to recover lost ground.

In the first six months overseas output rose 5.6 percent to an all-time high of 3.35 million vehicles. Production in Japan, by contrast, shrank 18 percent to 1.73 million units.

For the month of June, Toyota booked record overseas output of 637,240 units, and a best-ever sales total of 750,450 vehicles. The totals include the Daihatsu minicar and Hino truck units.

Meanwhile, June production in Japan slid 27 percent, while home market sales fell 24 percent.

Production hot spots include Asia, Europe and Latin America – regions where the product mix is more resilient to supply shortages because the vehicles require fewer semiconductors.

Output in regions such as Japan and North America, however, are still down. That is largely because those markets are production bases for Lexus-brand premium vehicles, which use a lot more chips for their advanced functions and are therefore more vulnerable to supply chain chinks.

Toyota has a global order backlog of about 2 million vehicles. But global procurement manager Kazunari Kumakura said earlier this week that the company was sticking to its plan to churn out 9.7 million Toyota and Lexus brand vehicles in the current fiscal year ending in March.

“We are working hard with our suppliers to manufacture 9.7 million vehicles. We formulated our annual production plans based on an assumption that the situation would improve,” he said.

“We will work hard to achieve such normal production as soon as possible.”

In the first six months of calendar-year 2022, global output is down 3.8 percent from the year before to 5.10 million vehicles. Production of just Toyota and Lexus vehicles was down 3.5 percent to 4.36 million, meaning the company is off pace from its 9.7-million target.