Toyota cuts production target for September amid chip shortage
- Toyota says it will produce about 40% less vehicles in September.
- Production will be down by up to 90K vehicles in North America this month.
- Toyota was better positioned than rivals to weather the chip crunch.
Toyota Motor Corp (TYO: 7203) said on Thursday it will produce about 40% less vehicles in September due to the global chip shortage. The announcement comes after peers Volkswagen and Ford Motor also slashed global production for next month.
Toyota will not produce 140,000 planned vehicles in Japan next month
According to the world’s largest automaker by sales volumes, production will take a hit at 14 factories globally, including Japan. It will not produce 360,000 vehicles that it had originally planned for September, out of which 140,000 were to be produced in Japan.
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Toyota, however, is still confident that it will hit its annual sales and production targets. It expects to produce 9.3 million vehicles in the current fiscal year and sell 8.7 million cars. Shares of the company tanked more than 4% today.
Earlier this year, the Japanese car manufacturer said its net profit more than doubled in the fiscal fourth quarter.
Toyota was better positioned than rivals to navigate through the chip shortage
On “Squawk on the Street”, CNBC’s Phil LeBeau said Toyota had so far beaten its rivals in terms of the ability to navigate through the chip crunch, but it’s finally catching up with Toyota.
“Following the Fukushima earthquake and Tsunami, there was a new mandate in Japanese businesses that you have to have enough inventory in case something like that would ever happen again. So, they had enough chips in their inventory to weather the chip shortage much better than competitors like Volkswagen, Ford Motor, General Motors and many other from around the world.”
The chip shortage is already affecting production for Toyota in North America, where the automaker said it will produce up to 90,000 less vehicles than originally planned. Last month, Invezz quoted a WSJ report that said Toyota sold more vehicles in the United States between April and June than General Motors.