Toyota expects to cut full-year output targets due to chip shortages | Jobs Reply

TOKYO, Oct 21 (Reuters) – Toyota Motor Corp ( 7203.T ) said on Friday its annual vehicle production may come in below its initial target, as a persistent global semiconductor shortage hampers efforts by the world’s biggest carmaker to boost output.

The Japanese company is under scrutiny as to whether it can maintain its record 9.7 million vehicle annual production target after missing interim targets in the first four months of the fiscal year that began in April.

Production recovered in August, but output in October and November is expected to be around 750,000 and 800,000 units respectively, below the average 900,000 monthly production plan from September to November that was estimated late last month.

Toyota did not say how much its annual production target would be cut, but output in the first five months of the current fiscal year was 6.7% below the company’s initial plan, according to a Reuters calculation based on company data.

A Toyota spokesman said a revised target would be released once the production outlook became clearer.

Friday’s announcement dampened hopes shared by Japanese automakers that chip shortages would ease and allow them to ramp up production in the second half of the fiscal year to offset limited output in the first half.

Rising inflation, rising interest rates and growing risks of an economic slowdown in key markets have also darkened the demand outlook, although auto manufacturing remains generally solid due to chip shortages and Covid-related restrictions.

Tesla Inc ( TSLA.O ) Chief Executive Elon Musk said earlier this week that “sort of a slowdown” in China and Europe was weighing on demand for its electric vehicles.

Toyota said Friday it will suspend 11 production lines at eight domestic factories next month for two to nine days, affecting output of a variety of vehicles, including the Corolla, RAV4 and Yaris.

It cut its global production target three times for the last financial year, from 9.3 million in May 2021 to 8.5 million in February. It produced around 8.6 million vehicles in the last financial year till March 31.

Reporting by Satoshi Sugiyama; Editing by Mark Potter, Clarence Fernandez and Jan Harvey

Our standards: Thomson Reuters Trust Policy.

Source link