Toyota cuts October production target on chip crunch

168
2
Toyota cuts October production target on chip crunch

TOKYO Toyota Motor Corp plans to produce around 800,000 vehicles worldwide in October, about 100,000 short of its average monthly production plan due to semiconductor shortages.

The reduction could be seen as a worrying sign that the chip shortage will stymie production at the world's largest automaker by sales in the second half of the financial year to end March.

It is seen as a crucial time for the group to bounce back from a production shortfall caused by a shortage of the key vehicle component and wider supply chain disruptions.

Toyota has not changed its global vehicle production target for the current financial year, sticking to its forecast for a record 9.7 million units.

The Japanese automaker said last month it aimed to produce about 900,000 vehicles per month on average from September through November.

It expects to produce about 850,000 vehicles per month on average from October to December, it said on Thursday.

Toyota will suspend production for up to 12 days for 10 lines at seven domestic factories, according to its October production plan.

Japan's automakers have previously suggested that the chip shortage is easing, but it is not known when it will be resolved.

A rise in electrified vehicles and cars equipped with advanced driverassistance systems will require more semiconductors per vehicle, according to Morgan Stanley MUFG Securities Co, despite expectations that the chip supply crunch will be lessened in the second quarter of the financial year onwards.

Toyota's rival Honda Motor Co said on Thursday that it would reduce car output by up to 40 per cent at two Japanese plants in early October due to ongoing supply chain and logistical issues, including the chip shortage.