Toyota Motor Corp said on Friday that its annual vehicle production was likely to fall short of its initial target, as a persistent global semiconductor shortage hampered the world’s largest automaker’s efforts to increase output.
The Japanese company has been questioned about its ability to meet its annual production target of a record 9.7 million vehicles after missing interim targets in the first four months of the fiscal year, which began in April.
Production increased in August, but output in October and November is expected to be around 750,000 and 800,000 units, respectively, less than the 900,000 monthly production plan projected late last month for September through November.
Toyota did not specify how much its annual production target will be reduced, but output in the first five months of the current fiscal year was 6.7% lower than expected, according to Reuters calculations based on company data.
A revised target will be announced once the production outlook is clearer, according to a Toyota spokesperson.
The announcement on Friday dampens Japanese automakers’ hopes that the chip shortage would ease and allow them to increase production in the second half of the fiscal year to compensate for constrained output in the first half.
Soaring inflation, rising interest rates, and growing risks of economic recession in major markets have also dimmed the demand outlook, though overall auto production remains constrained due to chip shortages and COVID-related restrictions.
Elon Musk, CEO of Tesla Inc, stated earlier this week that “a sort of recession” in China and Europe was weighing on demand for its electric vehicles.
Toyota announced on Friday that it will suspend 11 production lines at eight domestic factories for two to nine days next month, affecting the output of a wide range of vehicles including the Corolla, RAV4 and Yaris.
It has cut its global production target for the previous fiscal year three times, from 9.3 million in May 2021 to 8.5 million in February. In the fiscal year ending March 31, it produced approximately 8.6 million vehicles.
(Adapted from Nasdaq.com)