Toyota cuts production 40% to 60% due to COVID-19, supply problems – National
Toyota is reducing production in North America and Japan as the growing COVID-19 pandemic in Southeast Asia and elsewhere restricts supplies.
Japan’s top automaker said Thursday that it will cut production in the country by 40%, affecting 14 car assembly plants in the country.
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In North America, Toyota said it expects August production to drop sharply between 60,000 and 90,000 vehicles. A Toyota representative said that production fluctuates from month to month, but that it would amount to a production cut of between 40% and 60%.
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“Due to COVID-19 and unexpected events with our supply chain, Toyota is experiencing additional shortages that will affect production at most of our North American plants,” the company said in a statement prepared Thursday. “While the situation remains fluid and complex, our manufacturing and supply chain teams have worked diligently to develop countermeasures to minimize the impact on production.”
The company said production cuts in North America are not expected to have an impact on staffing levels.
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In Japan, production will come to a complete halt next month at some plants and partially at others, affecting a wide range of models, including the Corolla subcompact, the Prius hybrid and the Land Cruiser sports utility vehicle.
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Global production for September will decline by 360,000 vehicles, according to Toyota Motor Corp. But it stayed true to its annual forecast of producing 9.3 million vehicles as coronavirus risks were calculated.
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Of the lost production outside Japan, 140,000 vehicles are for Japan and 220,000 for overseas, with 80,000 in the United States, 40,000 in Europe, 80,000 in China, 8,000 in the rest of Asia and about 10,000 in other regions.
Toyota had already announced smaller production cuts for July and August in Japan.
“We sincerely apologize for the inconvenience caused to our customers and suppliers due to these changes,” Toyota said.
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The shortage of computer chips that are widely used in vehicles has been problematic for months as the world seemed to emerge from the pandemic and demand increased. Toyota had not been as affected as other major automakers, and now the spread of the delta variant has introduced new complications.
David Leggett, an automotive analyst at GlobalData, said that demand for cars is now low in Vietnam and that sales have already been affected in some markets for all manufacturers.
“The pandemic is clearly far from over and it appears, as far as the auto industry’s recovery path is concerned, to have a stinger in its tail,” he said.
Toyota has held up relatively well amid the pandemic, racking up a record profit for the April-June quarter of about $ 8 billion, a more than five-fold increase from the same period a year earlier.
– Automotive writer Tom Krisher and AP business writer Michelle Chapman contributed to this report.
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