Toyota cutting production due to chip shortage, COVID-19 surge

Toyota is cutting production in August and September due to a semiconductor chip shortage that has affected the whole industry, as well as a surge in COVID-19 cases. 

The company told reporters on Thursday it will cut production by 40 percent in September, creating 360,000 fewer vehicles than originally planned, Reuters reported.

The cuts will be at 14 factories, with Japanese plants producing 140,000 fewer vehicles than anticipated. Other places that will be affected include the United States, China, Europe and other Asian countries, according to Reuters.

“Adjustments will be made to production operations of plants for completed vehicles in Japan as follows, such as parts shortage resulting from the spread of COVID-19 in Southeast Asia. This is in addition to the adjustment of domestic production operations in August 2021 announced on July 22 and July 27,” Toyota said Thursday in a press release.

“We sincerely apologize for the inconvenience caused to our customers and suppliers due to these changes,” the company added.

The chip shortage and COVID-19 have caused many car companies to scale back production this past year.

Toyota has fared better than most because it has a larger stockpile of chips than its competitors, Reuters noted.

The company had a bigger stockpile because it became part of its plan to stockpile more chips after the Fukushima nuclear disaster and 2011 earthquake in Japan.

Toyota is looking to sell a total of 9.3 million vehicles for the year ending in March 2022.

“The 9.3 million global production plan takes into account certain risks,” executive Kazunari Kumakura said at a press conference, Reuters reported. “We want to achieve the numbers.”