Toyota cuts production due to material shortages

Toyota cuts production due to material shortages

Toyota, the world's first carmaker (just ahead of Volkswagen in sales) has announced that it will cut more than 40% of production by September. Due to the lack of components, and the consequences of the Coronavirus pandemic, we go from the 900,000 specimens expected to just over half. So far, the Japanese company had "buffered" the chip bleeding thanks to the large stocks prepared in the past years, which however are approaching exhaustion.

Although no layoffs are planned, at least for now, a large part factories located around the planet will stop operations. Among these, the Turkish plant from which the famous C-HR hybrid SUV comes out, or the stars and stripes plants that produce most of the models most loved by Americans. With some exceptions, such as the Tundra model that will continue to be assembled to support the ever-increasing demand for pick-ups (from the American public).

Despite bad news and Covid-related unforeseen events, Toyota spokespersons they let Autocar know that the goals for next year do not change. There is talk of over 9 million cars produced by the end of fiscal year 2022 (March), but it is not clear where the unassembled cars will come from in the coming months. The Japanese company claims to be in constant contact with suppliers to solve problems related to the lack of materials, but in the meantime there is no solution in sight.

In fact, there are numerous (read: practically all) the car manufacturers hit hard by the chip crisis that have had to adapt by limiting production. Some, like Volkswagen, are trying to do without technology at least temporarily, eliminating not-so-essential features from some models. But in the case of Toyota it does not seem like a viable path and the fact that the Japanese company has chosen to shut down its factories proves it.

Considering the energy transition, the new regulations on emissions and these technological problems, the automotive sector is in what we could define as “the perfect storm”. Whoever comes out better will perhaps be the brand that, more than anyone, will show the way forward in the coming years (for the entire market).