Toyota's Rivals Will Soon Be Eating Its Dust

Industry News / Comments

A bold new plan is about to begin.

Like every automaker, Toyota has struggled with the ongoing semiconductor chip crisis. But it had something none of its rivals had when the chip shortage first began: a large stockpile. Supplier network lessons were learned and applied following 2011's devastating tsunami. Toyota couldn't let supplier disruptions like that happen again. Eventually, those chip supplies began to dwindle and the Japanese automaker had no choice but to halt some production. It's time for that to end.

Reuters reports Toyota will begin a major production rebound in December and has already requested suppliers to make up for lost production. The goal is to build an additional 97,000 vehicles starting in December through March.

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Some weekend shifts are even being added because it's what needs to be done. Toyota has not confirmed the news at this time, but a spokesperson only said that "Nothing has been decided about production plans beyond November."

More than one source claims the production increase is happening and the timing is ideal. Pandemic infection rates have significantly dropped in Southeast Asia, the region where many of Toyota's suppliers are located. The report made no mention of whether the production increase plan will involve its US factories in Indiana, Kentucky, and Texas.

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The immensely popular Toyota RAV4 Hybrid calls the Lone Star State home while the Camry and Highlander are made in Kentucky and Indiana, respectively. The Prius, for example, is assembled in Japan. Toyota had to reduce its production target for the current financial year until the end of March by 300,000 vehicles last month due to increasing Covid-19 infections at key parts suppliers in Malaysia and Vietnam. Combined with the lack of chips, it's a situation Toyota simply can't allow to continue.

The expected production surge also brings another huge benefit: restocked dealership lots. Rivals continue to struggle with this, and car buyers will respond if Toyota dealers have vehicles ready to sell instead of waiting in line elsewhere for potentially months to take delivery.

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Source Credits: Reuters

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