Toyota Motor Corp. trimmed its production outlook by about 3% to 9 million units from 9.3 million for the fiscal year through March, blaming the spread of the coronavirus in Southeast Asia.
The world’s No. 1 automaker is adjusting production in September and reviewing plans for October, while sticking to its forecast for operating profit of ¥2.5 trillion ($22.7 billion) for the fiscal year.
Toyota warned last month of cuts due to the semiconductor and parts shortages as manufacturers were hit by COVID-19. Still, the move shows how even Toyota, having weathered the shortages well compared with peers, is vulnerable to the same constraints hurting the industry.
“Key reasons for the production adjustment include a decline in operations at several local suppliers due to the prolonged spread of COVID-19 in Southeast Asia and the impact of tighter semiconductor supplies,” Toyota said in a statement. “Although the outlook for November and beyond is unclear, current demand remains very strong.”
Japanese automakers have over the past decade invested heavily in Southeast Asia, a source of cheap labor and a supplement to their China operations amid trade tensions between that country and the United States. Thailand is a major production hub for Toyota, Mitsubishi Motors Corp., Honda Motor Co. and Nissan Motor Co.
Toyota said it is cutting September output by 70,000 units and October by 330,000. The company’s shares closed up 0.6% before the announcement.
The company is seeking to secure substitute parts to meet inventory-depleting global demand for cars. Carmakers globally have lost revenue because shortages have slammed output. India’s largest automaker by deliveries, Maruti Suzuki India Ltd., said volume would likely drop to about 40% of normal in August. In Japan, Suzuki Motor Corp. is cutting vehicle production by 20% in September, while in Europe, Renault SA plans to halt assembly plants in Spain for as long as 61 days before the end of the year.
“The spread of COVID-19 infections remains unpredictable, making it difficult to maintain operations due to lockdowns at various locations, and we are working to transfer production to other regions,” Toyota said.
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