It tried to outrun the pandemic and chip shortage, but they caught up.
Toyota Motor Company, which has been spared the brunt of the chip crisis because of its above average stockpile, is finally feeling the crunch. According to a Reuters report, the giant automaker cut its annual production target by 300,000 for the year, citing both the coronavirus and the chip shortage.
"It's a combination of the coronavirus and semiconductors, but at the moment it is the coronavirus that is having the overwhelming impact," said Toyota executive Kazunari Kumakura, after the company revised its production target. It's the company's two factories in Vietnam and Malaysia that are being majorly impacted by Covid.
Toyota now plans to produce 9 million vehicles in the fiscal year that stretches to March 31. Its former estimate was 9.3 million, for a 3% decrease. However, it didn't change it's $22.7 billion operating forecast. That cut adds to the 360,000 vehicles lost this month, though it hopes to make some of that production up by the end of the fiscal year - we're expecting with its strong-selling RAV4 Prime.
Toyota is far from the only company feeling the crunch. Overall car sales in China fell by a fifth in August, because there just weren't enough vehicles. As we've noted before, much of the chip crisis came when chipmakers switched over from making car chips to chips for home electronics during the pandemic. No one was driving, everyone was zooming.
Earlier this week Mercedes said that it expects the shortage to last until 2023, which would be sobering. That's extra tough for a company that just launched several new EVs that feature loads of chips on the EQE and EQS sedans.
The one manufacturer that isn't struggling mightily is Hyundai, which changed its model mix to prioritize products that are in demand. Hyundai is still managing to keep inventory, and predicts that the chip shortage will not get any worse. For its sake, Mercedes, Toyota, and everyone else, we hope it's right.