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Chip Crunch Forces Further Production Cuts At Toyota

Toyota said on Tuesday it would make additional production cuts in March due to a shortage of computer chips, days after reducing its domestic production target for the April-June quarter

Toyota said on Thursday its first quarter operating profit dropped by 42%.
Toyota Logo. File photo: Reuters.


Toyota Motor said on Tuesday it would make additional production cuts in March due to a shortage of semiconductor chips, days after the Japanese automaker reduced its domestic production target by as much as 20% for the April-June quarter.

Toyota said it would suspend production on one line at a factory for eight weekdays starting March 22 through to the end of the month. That is in addition to the suspension of domestic production at two factories announced last month.

Production of about 14,000 Noah and Voxy minivans would be affected by the latest suspension, a Toyota spokesperson said.

Last week, Toyota said it would lower production for three months starting April to ease the strain on suppliers, which were struggling with the shortages of chips and other parts.

The news follows Toyota’s announcement on Monday that it would halt production at its joint venture plant with FAW Group in the city of Changchun, China, due to fresh Covid-19 curbs.

Despite the cuts, Toyota would maintain its 8.5 million vehicle production target for the year, the spokesperson said.

A global chip shortage has plagued companies from smartphone makers to consumer electronics firms and car makers, forcing companies including Toyota to repeatedly cut production even as raw material costs rise.

US EV maker Rivian Automotive warned last week that supply-chain issues could force it to cut planned production by half this year.

German car maker Volkswagen said on Tuesday it sold 2 million fewer cars than planned last year due to the chip crunch and warned that ongoing supply bottlenecks, high commodity prices and the Russia-Ukraine conflict could hit growth in 2022.

Toyota, Volkswagen and other automakers have stopped production at their Russian plants due to supply chain disruptions after the country invaded Ukraine.

Shares in Toyota closed up 2.14% on Tuesday, while Tokyo’s benchmark Nikkei 225 closed up 0.15%.


• Reuters with additional editing by Jim Pollard



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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years.


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