Toyota anticipates decrease in full-year output due to semiconductor shortage

Toyota Motor Corp informed that its annual vehicle production may come down below its initial target due to the persistent global semiconductor shortage. This ongoing chip crisis has dampened the efforts of Toyota to boost its sales output. The world's biggest automaker remains uncertain whether it can keep its annual production target of a record 9.7 million vehicles after it missed interim goals in the first four months of the fiscal year that began in April.

According to a report by Reuters, Toyota's production jumped in August, but the output of October and November are expected to be in the range of 7,50,000 and 8,00,000 units respectively which is below the average 9,00,000 monthly production plan for September through November that the Japanese automaker projected late last month.

Toyota did not inform about the share of production that it expects to come down, however, the output in the first five months of the current fiscal year plummeted by 6.7 per cent compared to the company's initial plans. A revised target will be disclosed once the outlook for production becomes clearer, a Toyota spokesperson said.

With rising inflation and interest rates along with a growing risk of economic recession in major markets with the semiconductor shortage, the hopes of having positive demand have been under constraint. Toyota also shared that it will suspend 11 production lines at eight domestic factories next month for between two to nine days which will affect the output of a wide variety of vehicles including the Corolla, RAV4 and Yaris.

Toyota has slashed its global production target for the last financial year three times, reducing it from 9.3 million in May 2021 to 8.5 million in February. The automaker also ended up producing about 8.6 million vehicles in the last financial year to March 31.