Toyota chops 300,000 vehicles off production targets

Automakers worldwide are feeling the pinch in production in the wake of the pandemic and resulting in chip shortages. A new report claims that Toyota has cut its annual production target by 300,000 vehicles, blaming slowed output at parts factories due to COVID-19. Toyota has specifically said that slowed output at its parts factories in Vietnam and Malaysia are compounding problems already experienced with the chip shortage.

Toyota executives have confirmed the combination of coronavirus and the semiconductor shortage is responsible for production woes. However, it's clear that coronavirus is currently the biggest impact on its reduced production. Toyota was able to resist reducing output goals for a while because it had a stockpile of components.

However, it's now burned through that stockpile set up after the major earthquake in Japan that occurred in 2011 and impacted the automaker's production capability. Many domestic automakers, including Ford and Chevrolet, have scaled back production due to the chip shortage. So far, none of the American automakers have specifically pointed the finger at increasing COVID-19 infections as the reason for lowered production.

Toyota has confirmed that it plans to build 9 million vehicles in its physical year ending March 31. It had previously expected to build 9.3 million vehicles during that timeframe. Interestingly, while Toyota is confirming a significant production cut, it did not revise its forecast for profits of $22.7 billion during the fiscal year.

The demand for chips in many industries continues to increase, with many people still working from home, leading sales of smartphones, tablets, and computers to continue to be high. Just about every type of product manufactured today uses microchips is feeling the impact of the chip shortage.