Japanese car giant revises production targets as it cuts factory output by 150,000 cars in February 2022. What will this mean for Toyota customers in Singapore?

TOKYO, JAPAN 

The whole business about worldwide semiconductor ship shortages causing delays in new car production is far from over. 

After holding out for months by diving into its own reserve inventory, automotive giant Toyota has reported that its production targets for February will take a hit because of the double whammy of constant parts shortages and the evolving Covid-19 pandemic.

In a statement released on 18th January, Toyota revealed that the continuing semiconductor shortage has forced it to reduce worldwide output by 150,000 units in February. This drops the brand’s production output to about 700,000 vehicles for the month ahead. The cause for the drop in production was placed squarely on the ongoing microchip crisis.

In Singapore, drivers who have placed orders for new Toyotas have also seen new car deliveries delayed in small batches over the course of 2021.

The February 2022 production cutback will mean delayed deliveries for Singapore as well. Jasmmine Wong, CEO of Inchcape Greater China and Singapore, confirmed the situation, but given the fluidity of the supply chain, hard numbers could not be confirmed. She said, “This is a global condition and Singapore is being affected as well. Customers are our priority and we keep them informed with the updates we have.”

In other words, if you have already ordered a new Toyota are still waiting for delivery, your sales consultant will keep you updated of the situation but you will get your car within a reasonable time frame.

Toyota had initially projected that it will build a total of 9 million new vehicles worldwide for the 2021 financial year, which ends on 31st March 2022. The company has now admitted that this number will be hard to reach.

Toyota’s official statement noted, “As a result of the revision, the full-year production forecast for the fiscal year ending March 31, 2022, is expected to be lower than the previous forecast of 9 million units.” 

Based on current numbers, Toyota’s Global procurement manager Kazunari Kumakura said that achieving the original production target of nine million vehicles for the 2021 financial year would mean churning out more than 1 million new vehicles in March alone. Nearly impossible even for an automotive giant like Toyota.

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Toyota did not say what the new production target would be, though it started the 2021 financial year with a production target of 9.3 million vehicles, and the number has been revised downwards twice since then.

Toyota said February suspensions would hit 11 lines at eight plants in the home market.The brand has stated that the  150,000-unit reduction for February would come from Japan and the rest from overseas production plants.

The Japan slowdowns will affect output of the Toyota Prius, RAV4, C-HR and Camry, as well as Lexus models including the LS, IS, NX and UX.

Meanwhile, Toyota Motor North America has confirmed that it will cut production of approximately 25,000 to 35,000 vehicles as part of the global reduction because of supply chain and COVID-related challenges.

Toyota had already missed its November 2021 target of making 850,000 vehicles worldwide. The carmaker fell slightly short and managed to produce only 821,329 vehicles that month. Yet, the brand had earlier said global production would reach 800,000 units in December and January, though it has not announced official production results for those months yet.

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In early 2021, while other automakers were caught by the worldwide semiconductor chip shortages brought on by Covid-19 related factory shutdowns in the far east, Toyota confounded the industry by boosting output during the same period. The official statement back then was that the company simply dug  into their own stockpile and had numerous other supply chains to fall back on. 

Despite the chip shortage, output cutbacks and stagnant sales, Toyota delivered a 48 percent uptick in operating profit in its July-September 2021 quarter. Citing aggressive cost control and beneficial foreign exchange rates, Toyota also lifted its full-year profit forecasts to near record levels, but by late 2021 however, Toyota was also running low on components to build new vehicles and increasingly saw more challenges in its supply chain. 

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