Global vehicle output of Toyota falls again

As a result of COVID outbreaks, extreme weather, a recall investigation, and a lingering chip shortage, Toyota Motor Corp. reported on Tuesday that its global car production for the month of July had decreased 8.6% year over year, missing its target for the fourth consecutive month.

Even as China relaxes influenza restrictions and semiconductor shortages appear to be reducing, the continuing decline in overall performance in July from the largest automaker in the world by sales has sparked worries that Toyota may have to cut its annual production target of 9.7 million vehicles.

Last month, Toyota built 706,547 automobiles across the globe, falling short of both its aim of about 800,000 units and the output of 773,135.

Production has fallen 10.3% short of expectations in the first four months of the current fiscal year, which started in April.

Although China’s rigorous COVID regulations and chip shortages have caused supply chain problems for the whole car industry, Toyota has also had to cope with coronavirus outbreaks at a nearby facility, excessive rain in Japan, and production line halts because of recall investigations.

In July, Toyota reported record foreign output, up 4.5%, driven by a strong rebound in Europe, China, and the rest of Asia, outweighing domestic production’s 28.2% decline.

Seiji Sugiura, senior analyst at Tokai Tokyo Research Institute, stated, “Considering Toyota plans to make nearly 700,000 automobiles in August this year and it made approximately 530,000 in August last year, I think the situation is starting to improve.”

In an effort to rebound strongly, the corporation announced earlier this month that it would maintain its yearly production target while planning to increase output through November, subject to the availability of employees and parts. It anticipates that manufacturing will increase in September to a record-high 850,000 automobiles.

However, Sugiura warned that Toyota was not yet out of the woods, citing the possibility of uncertain steady chip sourcing and doubting the company’s ability to meet the 9.7 million manufacturing target.

“In order to recover from the scenario in the first half of the year, I think the company will likely set the monthly production level at 800,000 or 850,000 units in the second half of the year. A record will be set if output hits 800,000 units in a single month “said he.