Toyota Is Anticipating A Lot Of Trouble

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Japan's biggest automaker is planning to slash production in anticipation of a huge drop in demand.

The world's biggest automaker, Toyota, is anticipating a huge slump in demand in 2020 as a result of the novel coronavirus pandemic that's swept over the globe. The company recently announced that it intends to cut finished vehicle production in Japan by some 40 percent, which could be an indicator of more cuts to come, both at Toyota's international vehicle assembly plants, and across the global automotive industry as a whole.

Driving enthusiasts with their sights set on the all-new Toyota GR Supra might be able to relax some, despite the news; the fifth-generation Supra is assembled under contract by Magna Steyr in Austria, alongside the closely related BMW Z4 roadster. But Prius shoppers might not be so lucky, and for the rest of the lineup, things don't look great.

2020 Toyota GR Supra Three Quarter Front Right Side View In Motion Toyota
2020 Toyota GR Supra Three Quarter Rear Left Side View In Motion Toyota
2020 Toyota GR Supra Three Quarter Rear Right Side View In Motion Toyota
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Overall, Toyota's domestic vehicle production will be slashed to just 79,000 units for the month of May, as a result of numerous shift cuts and non-operational days. Non-operational days - dates on which Toyota will idle its factories rather than continuing to crank out cars - will include May 1st and May 11th, with additional dates likely, and from May 12th, a number of assembly lines dedicated to export vehicle production will switch from double to single shifts.

These moves are likely driven largely by a desire to avoid creating an overabundance of new cars Toyota might have trouble selling in a more budget-conscious economic climate.

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Three Quarter Front Right Side View Toyota
2019-2020 Toyota Corolla Hatchback Test Drive Front Angle View Toyota

But in addition, Toyota is anticipating further disruptions to its global supply chain. Remember, modern cars include components and assemblies provided by suppliers from all around the world. Even if Japan manages to overcome its Covid-19 concerns, those suppliers' home countries might not be so lucky. Concerns about parts availability alone will result in several production lines being idled from April 20-22.

The global automotive market is exceptionally difficult to predict at the moment. Back in late-February, even before the US started seriously implementing widespread social-distancing and stay-at-home initiatives, Moody's forecast a 2.9% slump in new car sales globally in 2020. More recently, WoodMac announced it anticipated a 43-percent drop in global EV sales for the year. But ultimately, both these projections are little more than educated guesses, and there's truly no telling how quickly the market will rebound.

Front Angle View Toyota
2019-2020 Toyota RAV4 Three Quarter Front Left Side View Toyota

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