Skip to main content
Sister Publication Links
  • Automotive News
  • Automobilwoche
  • Automotive News Canada
  • Automotive News China
Subscribe
  • Subscribe
  • Newsletters
  • Login
  • HOME
    • Latest news
    • Automakers
    • Suppliers
    • New Product
    • Environment/Emissions
    • Sales By Market
    • On The Move
    • Auto Shows
    • Munich Auto Show
    • Geneva Auto Show
    • Paris Auto Show
    • Beijing Auto Show
    • Shanghai Auto Show
  • Features
    • Long Read
    • Interview of the Month
    • Focus on Electrification
    • Focus on Technology
    • Segment Analysis
    • Cars & Concepts
    • Supplier Spotlight
    • Europe By The Numbers
  • Opinion
    • Blogs
    • Commentary
    • Guest columnists
  • Photos
    • Photo Galleries
    • Geneva Photo Gallery
    • Beijing Photo Gallery
    • Frankfurt Photo Gallery
    • Paris Photo Gallery
    • Shanghai Photo Gallery
  • Podcasts
  • Car Cutaways
  • EVENTS
    • ANE Congress
    • ANE Rising Stars
    • ANE Eurostars
  • More
    • Publishing Partners
    • Social Media
    • Contact Us
    • Media Kit
    • About Us
    • Capgemini: All or nothing: Why circular business models require a holistic approach
    • Capgemini: Invent Head on automotive takeaways from CES 2023
    • Capgemini: Securing the industry's future through a radical rethink
    • Capgemini: Succeeding with the automated driving journey through AI
    • Capgemini: The circular economy is spurring new thinking on EV batteries
    • Capgemini: Toyota and Capgemini leaders on how OEMs can handle industry changes and succeed
    • HEXAGON: Plugging into data is the only way to make winning EVs
    • TUV Rheinland: Ideas, services and certifications for smart mobility
    • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
    • Toyota Europe
    • UFI Filters
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter
MENU
Breadcrumb
  1. Home
  2. Automakers
August 19, 2021 05:35 AM

Toyota will cut global output by 40% on chip shortage

Production in Japan, North America, China and Europe will be scaled back

Hans Greimel
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    Toyota production Japan

    Production at Toyota's Motomachi plant in Japan.

    TOKYO – Toyota, which until now has largely skirted the supply chain woes that hampered rivals worldwide, will slash global output some 40 percent in September as it finally feels the bite of the pandemic and the global shortage of automotive microchips.

    In announcing the hit on Thursday, Toyota blamed the suspensions on bottlenecks in worldwide chip supplies and the outbreak of the COVID-19 Delta variant in Southeast Asia.

    The sweeping shutdowns, which begin in August and run through the end of September, will hammer Toyota output in virtually every major market -- Japan, the U.S., Europe, China and Asia.

    Japan’s biggest automaker expects to lose 360,000 vehicles of output globally in September alone. North American operations will lose about 80,000 units, Europe about 40,000 vehicles, China some 80,000 units, and other Asian operations will feel an 8,000-unit impact.

    The cutbacks will affect 14 Toyota assembly plants in Japan and 27 of 28 production lines here. Toyota said it expects to lose about 140,000 units of production from home market factories in September, on top of another 20,000 units lost through dial backs in August.  

    Affected factories include the Takaoka and Tsutsumi plants in Japan, which together build the RAV4 and Harrier crossovers, Corolla and Camry sedans as well as the Prius hybrid, among other nameplates. Also hit is the Tahara plant that makes the Lexus LS, IS, RC, RCF and NX models.

    The loss represents about 40 percent of Toyota’s initially planned global output for September.

    Despite the worldwide suspensions, Toyota said that, for now, it was holding steady its production plan to build 9.3 million vehicles globally in the current fiscal year ending March 31, 2022. That total covers output only from Toyota and Lexus, not Daihatsu or Hino.

    “We have factored in risk factors in our annual plan. But as for September, the impact came sooner and deeper than expected,” Chief Communications Officer Jun Nagata said.

    Global procurement manager Kazunari Kumakura said there are continuing supply chain risks and would not say when the global crunch might ease. He also declined to say what suppliers were affected or what kinds of components were in especially short supply.

    "In October and beyond, we think there are risks so we will monitor the situation every day, going forward. In October and beyond, we would like to recover as much as we can, but we already have tight production plans," Kumakura said, adding that Toyota wants to still hit 9.3 million.

    "We will do our utmost to achieve this target."

    Global impact

    Toyota had intended to build around 900,000 vehicles worldwide in September. The new plan marks a large drop from that goal and from the 973,000 vehicles Toyota produced in September 2020, just as it began recovering from the pandemic shutdowns in the early part of last year. In September 2019, before COVID-19 struck, Toyota manufactured 905,000 vehicles worldwide.

    Because the pandemic is disrupting supplier operations in Southeast Asia, it is affecting Toyota operations worldwide that depend on those parts. The impact underscores the fragile, highly interconnected nature of today’s global automotive business.

    Earlier this month, Japanese rival Nissan said it would idle its massive plant in Smyrna, Tenn., for two weeks because of a COVID-19 outbreak at a microchip supplier plant in Malaysia.

    Toyota declined to identify the supplier or the parts triggering its latest suspensions.

    AutoForecast Solutions has estimated the chip shortage has resulted in the loss of 5.8 million vehicles from production plans globally. AFS forecasts the toll eventually could rise to 7.1 million.

    Toyota has largely confounded the industry by ramping up output and notching record profits despite the pandemic-microchip double whammy. In the company’s fiscal first quarter ended June 30, the Japanese juggernaut reported all-time high quarterly operating profit as well as record fiscal first-quarter results for net income, revenue and global retail sales.

    Toyota had previously credited its stellar supply chain management – marked by bigger inventories of key parts, higher visibility into operations at lower-tier parts makers and more strategic long-term planning – for helping it avoid big interruptions.

    Warning signs

    But even Toyota has not been completely problem free. In a sign of brewing trouble, Toyota shut down multiple lines at four plants in Japan for several days in early August. It cited a shortage of parts resulting from the spread of COVID-19 in Southeast Asia, where plants were closed due to pandemic shutdowns. Those suspensions affected output of certain Lexus models and other nameplates, including the Land Cruiser, Corolla and Alphard and Voxy vans.  

    And the day before this week’s announcement, Toyota suspended output at all three of its plants in Brazil because of supply disruptions from Southeast Asia triggered by the pandemic.

    In Thailand, one of Toyota’s three assembly plants there has been suspended since July 21.

    For the first six months of 2020 through June, Toyota’s global production was up 35 percent to 5.30 million vehicles, and global sales were up 31 percent to 5.47 million units. Even a cutback of more than 300,000 units in September would represent a relatively small percentage of Toyota’s annual production volume, which reached 9.21 million vehicles in calendar year 2020.

    Toyota’s output, including production at Daihatsu and Hino, peaked at 10.73 million vehicles in calendar year 2019. Toyota does not announce calendar-year production forecasts.

    But last month, it said it planned to build some 9.3 million vehicles in the current fiscal year to March 31, 2022. But that total is not a direct comparison because it excludes Hino and Daihatsu.

    Naoto Okamura contributed to this report.

    Related Article
    VW says chip crunch may cause further production cuts
    RECOMMENDED FOR YOU
    VW's potential battery IPO attracts high investor interest, top shareholder says
    Recommended for You
    VW Battery production
    VW's potential battery IPO attracts high investor interest, top shareholder says
    cupra-born_01.jpg
    VW's Cupra brand weighs entering U.S. market with larger EVs
    The Ford Mach-E
    Ford expects to lose $3B on EVs this year
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get Free Newsletters

    Sign up and get the best of Automotive News Europe delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    SUBSCRIBE TODAY

    Get 24/7 access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that’s vital to your business.

    SUBSCRIBE NOW
    Connect with Us
    • Twitter
    • Facebook
    • LinkedIn
    • Instagram

    Founded in 1996, Automotive News Europe is the preferred information source for decision-makers and opinion leaders operating in Europe.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI  48207-2997
    Tel: +1 877-812-1584

    Email Us

    ISSN 2643-6590 (print)
    ISSN 2643-6604 (online)

     

    Resources
    • About us
    • Contact Us
    • Advertise with us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Awards
    • Rising Stars
    • Eurostars
    • Leading Women
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News Europe
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • HOME
      • Latest news
      • Automakers
      • Suppliers
      • New Product
      • Environment/Emissions
      • Sales By Market
      • On The Move
      • Auto Shows
        • Munich Auto Show
        • Geneva Auto Show
        • Paris Auto Show
        • Beijing Auto Show
        • Shanghai Auto Show
    • Features
      • Long Read
      • Interview of the Month
      • Focus on Electrification
      • Focus on Technology
      • Segment Analysis
      • Cars & Concepts
      • Supplier Spotlight
      • Europe By The Numbers
    • Opinion
      • Blogs
      • Commentary
      • Guest columnists
    • Photos
      • Photo Galleries
      • Geneva Photo Gallery
      • Beijing Photo Gallery
      • Frankfurt Photo Gallery
      • Paris Photo Gallery
      • Shanghai Photo Gallery
    • Podcasts
    • Car Cutaways
    • EVENTS
      • ANE Congress
      • ANE Rising Stars
      • ANE Eurostars
    • More
      • Publishing Partners
        • Capgemini: All or nothing: Why circular business models require a holistic approach
        • Capgemini: Invent Head on automotive takeaways from CES 2023
        • Capgemini: Securing the industry's future through a radical rethink
        • Capgemini: Succeeding with the automated driving journey through AI
        • Capgemini: The circular economy is spurring new thinking on EV batteries
        • Capgemini: Toyota and Capgemini leaders on how OEMs can handle industry changes and succeed
        • HEXAGON: Plugging into data is the only way to make winning EVs
        • TUV Rheinland: Ideas, services and certifications for smart mobility
        • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
        • Toyota Europe
        • UFI Filters
      • Social Media
        • Facebook
        • Instagram
        • LinkedIn
        • Twitter
      • Contact Us
      • Media Kit
      • About Us