Toyota suspends production due to Shanghai shortages

Toyota is suspending more production due to parts shortages caused by the COVID-19 lockdown in Shanghai, a sign that supply-chain bottlenecks could persist even as the city starts to gradually reopen.

Toyota’s global production plan for June stands at about 850,000 vehicles, 250,000 of which will be made in Japan and the rest overseas. This represents a cut of about 100,000 vehicles for June worldwide.

The company aims to produce an average of 850,000 units a month through August and is keeping its fiscal year output target of 9.7 million vehicles.

“We will continue to make every effort possible to deliver as many vehicles to our customers at the earliest date,” Toyota said.

The automaker issued a statement Tuesday listing production lines that will be suspended in Japan, including at five plants early next month on top of stoppages already announced for May.

“The shortage of semiconductors, spread of COVID-19 and other factors are making it difficult to look ahead,” Toyota said in the statement. “Due to parts supply shortages caused by the lockdown in Shanghai, we have decided to suspend operations in May and in June.”

Shanghai, which went into lockdown in March to combat a COVID outbreak, has been moving to officially ease restrictions that have severely disrupted business activity and kept millions of people stuck in their homes.

While curbs are loosening, the lockdown may continue to cause “a considerable amount of damage to global supply chains” as backlogs hinder the movement of goods, according to the UK-based Business Continuity Institute.

Earlier in May, Toyota forecast a 20 percent decline in operating profit for this fiscal year due to an unprecedented increase in logistics and raw materials costs.