Toyota Suspending December Production Of RAV4 And 4Runner

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The problem continues to be the supply chain. No surprises there.

UPDATE: An employee at the RAV4 plant in Woodstock, Ontario, has reached out to inform us that production of the RAV4 specifically will only be suspended for six days in all of December, with the team on non-production for three Thursdays and three Fridays only. Interestingly, incomplete RAV4s are not short of semiconductor chips but of panoramic sunroofs.

UPDATE #2: A team leader at the Cambridge plant in Ontario reached out to us stating that right now the NX production is not affected. The NX cannot be built without also building RAV4's, so if they're building one, they're building both. There are currently 0 days of non-production scheduled in December. The sister plant in Woodstock is the only plant in Canada with any planned non-production days, and it's only for 6 days in December. They only build the RAV4. The RAV4 is also built in the Kentucky plant in the US. There is no known major non-production scheduled.

Automakers continue their recovery from the global supply chain havoc caused by the coronavirus, and Toyota, the world's biggest automaker, is not immune. Automotive News has confirmed with the Japanese automaker that it will suspend production for several popular vehicles next month because it's lacking the necessary components to build them.

The vehicles affected include the highly popular Toyota RAV4, the aging but still beloved 4Runner, and a sizable list of Lexus models, such as the GX, NX, UX, and ES.

A total of 700,000 vehicles will be built by Toyota in December, 250,000 in Japan and 500,000 at its other facilities scattered across the globe. That may sound like a lot of vehicles, but that figure has typically been around 800,000 in recent months.

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This is not the first time Toyota has scaled back production due to a lack of components, specifically semiconductor chips. Last month, Toyota announced its full fiscal year production forecast would be reduced after refusing to do so for months. Whether it was due to investors or internal pressure, the carmaker finally revised its figures.

Earlier this month, Toyota said its production goal would drop by 500,000 units. Instead of 9.7 million vehicles rolling off the assembly line by March 31, the end of the fiscal year, it'll now be 9.2 million. Things like this matter to any company's bottom line. When Toyota's operating profit dropped 25 percent in the third business quarter of this year, thus forcing it to cut its production output.

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However, that 9.2 million figure is still solid. In fact, it's an all-time high, beating the previous record set on March 31, 2017, of 9.08 million vehicles. Toyota has weathered the pandemic storm far better than most rivals, but only because it learned a painful lesson in 2011 following the destructive tsunami. The company's just-in-time supply chain was interrupted, and production had to be halted.

One fundamental change Toyota made following that was to stockpile semiconductor chips. Even though it came at a great expense, that stockpiling allowed Toyota to get by for months when rivals could not. But those chips ran out over time, and now Toyota is in the same situation as everyone else.

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Source Credits: Automotive News

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