Toyota to produce eight lakh cars a month globally as chip shortage persists

Toyota Motor Corp. has said that it will globally manufacture around 800,000 cars each month and blamed factors such as the persisting semiconductor shortage for the reduced output figure. In its home base of Japan, Toyota had already stated it will cut production by 20% in April, 10% in May and by five per cent in the month of June.

In a statement issued by the company, Toyota informed that because it is difficult to forecast how international factors will play out - this includes the chip crisis situation as well as the impact of Russia-Ukraine war on supply chains, the actual production could be even lower than the eight lakh figure put out for now. How this could potentially impact its production numbers for the entire year would be interesting to see because the company led all automotive brands in this regard in 2020 and 2021, beating second-placed Volkswagen AG. Experts say that the Covid situation and chip shortage did not hit Toyota as hard as it had other auto giants like Volkswagen, GM, Ford and others. But the present situation remains precarious, for Toyota as well as other global brands. (Read more here)

If the chip shortage itself wasn't an unprecedented hurdle to cross, the Russia-Ukraine war has affected supply chains in many parts, to varying degrees and for various automotive brands. The supply of neon, for instance, has been particularly hit because Ukraine provides the world with 70% of the needs for the gas. Neon is required for lasers which are needed for microchip manufacturing. Many feel that while the impact from this may not be felt in the immediate future - also because neon suppliers were well prepared, it could be a concern if the Russia-Ukraine war continues unabated in the times to come.

According to Toyota Purchasing Chief Kazunari Kumakura, production is at a normal level but not enough to recover lost output.