Toyota to review production plans as global disruptions hinder output
Toyota Motor Corp will review its production plans globally to make them more realistic as global disruptions that have hindered the automaker’s attempts to boost its output. The carmaker's efforts reflect the challenges being faced by it due to semiconductor crisis, a cyberattack and Ukraine-Russia conflict as it tries to make up for lost production.
Last month, Toyota cut its output goal for the fiscal year through March to 8.5 million vehicles from a previous target of 9 million. The company still hasn't announced a new production target for the current fiscal year. “We need to examine the conditions before us. If we do not continue to make sound production plans, this will lead to exhaustion," CEO Akio Toyoda told union leaders, according to a publication on the company’s website.
Toyoda added that a production plan that exceeds the capacity of personnel and equipment is abnormal. The situation is “already at the limit," he said, adding that the company will review production plans based on current realities.
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Other recent disruptions such as a cyberattack on one of Toyota's suppliers that took all of its Japan plants offline for a day last week, implies that it will be difficult for the company to recover any additional production for the fiscal year ending this month, as per Bloomberg Intelligence analyst Tatsuo Yoshida.
Amid the supply chain snags earlier in the pandemic, Toyota was relatively resilient and has been trying to ramp up production to meet soaring global demand for cars. The company said last month it was planning to produce 950,000 vehicles in March, up from 843,393 assembled the same month last year. “We learned first hand during times like major recalls, the importance of prioritizing safety and quality above all else and not neglecting the people supporting us on the ground," Toyoda added.
(with inputs from Bloomberg)