Toyota to Cut Global Production For September by 40% Due to Coronavirus Resurgence & Chip Shortage

Toyota Motor has announced that it will reduce global production for September by 40% from its previous plan, as the spread of the coronavirus in Southeast Asia adds to supply troubles for Japan’s top automaker.

The car manufacturer previously planned to build nearly 900,000 automobiles for the month, but that number has been reduced to about 500,000.

Unlike other automakers, Toyota had been relatively unscathed by the global chip shortage. But other components are starting to run short as Southeast Asian nations, home to key links in the company’s supply chain, struggle to contain the coronavirus, forcing Toyota to halt assembly lines at home and abroad.

“The chip shortage is also a problem, but the big impact is from the coronavirus in Vietnam and Malaysia,” a spokesperson said.

Production plans for October and beyond depend on the situation in these Southeast Asian nations, the spokesperson also said.

The cutback will see the automaker will temporarily suspend production lines at multiple Japanese factories, including its Takaoka plant in Aichi Prefecture, starting early next month. A total of 14 lines plants in Japan will be affected. Production in North America, China, Europe, and other regions will be scaled back by a total of 220,000 vehicles.

Toyota has not downgraded its production forecast or earnings estimates for the year ending next March.

At roughly 500,000 units, Toyota’s global production in September will be the lowest since May 2020, when the coronavirus was hitting U.S. and European factories.

Other automakers also feel the impact of the Southeast Asian lockdowns disrupting supplier production schedules.

Honda Motor cut vehicle output in the Chinese city of Guangzhou this month by 20,000 autos or 20% of its production plan as of the end of July. Nissan Motor has shut its plant in the U.S. state of Tennessee for two weeks owing to the impact on procurement of chips from Malaysia. Volkswagen, General Motors, and other global automakers also have been forced to curtail production since late last year, mainly as a result of the semiconductor shortage.