Under delta, supply chain strains, Toyota slashes production – KIRO 7 News Seattle

TOKYO – (AP) – Toyota is cutting production in North America and Japan as the escalating coronavirus pandemic in Southeast Asia and elsewhere constrains supplies.

Japan’s leading automaker announced Thursday it would cut domestic production by 40% across 14 auto assembly plants in the country.

In North America, Toyota expects production to be reduced by 60,000 to 90,000 vehicles in August. A Toyota representative said production fluctuates from month to month but that this would represent a production cut of between 40% and 60%.

“Due to COVID-19 and unexpected events in our supply chain, Toyota is experiencing additional bottlenecks that will affect production at most of our North American plants,” the company said in a prepared statement on Thursday. “While the situation remains fluid and complex, our manufacturing and supply chain teams have worked diligently to develop countermeasures to minimize the impact on production.”

Production cuts in North America are not expected to have any impact on headcount.

In Japan, some plants and parts of others will completely cease production next month for a variety of models, including the Corolla subcompact, the Prius Hybrid and the Land Cruiser sport utility vehicle.

According to Toyota Motor Corp. global production will decrease by 360,000 vehicles for September. But it stuck to its annual forecast of 9.3 million vehicles as coronavirus risks were factored in.

Of the lost production from Japan, 140,000 vehicles are in Japan and 220,000 overseas, of which 80,000 in the USA, 40,000 in Europe, 80,000 in China, 8,000 in the rest of Asia and around 10,000 in other regions.

Toyota had already announced minor production cuts for July and August in Japan.

“We sincerely apologize for the inconvenience this change has caused our customers and suppliers,” said Toyota.

A shortage of computer chips, which are commonly used in vehicles, has been problematic for months as the world appeared to have emerged from the pandemic and demand increased. Toyota hadn’t been hit as hard as some other major automakers, and now the proliferation of the Delta variant has brought new complications.

David Leggett, auto analyst at GlobalData, said auto demand in Vietnam has now declined and sales in some markets are already impacted for all manufacturers.

“The pandemic is clearly far from over and appears to have a sting in its tail as far as the auto industry’s recovery path is concerned,” he said.

Toyota has held up relatively well amid the pandemic, posting record earnings for the April-June quarter of about $ 8 billion, an increase of more than five times over the same period last year.

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Auto Writer Tom Krisher and AP Business Writer Michelle Chapman contributed to this report.

Yuri Kageyama is on Twitter at https://twitter.com/yurikageyama

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