Toyota Motor shares fell as much as 5% on Wednesday after the Japanese carmaker said it expects to miss its annual 9 million vehicle production target.
The company said competition for semiconductors meant it did not secure enough to ramp up car output to offset production lost during the pandemic last year.
“Hitting the 9 million mark is going to be extremely difficult,” Kazunari Kamakura, a Toyota executive, said during an online briefing. He could not predict how long the chip shortage would last.
Toyota and other automakers have been forced to curb production even as demand in key markets such as China has rebounded.
In addition to supply-chain disruptions, car makers also have had to contend with soaring semiconductor demand at consumer electronic companies.
Omicron Surge a Concern for Toyota
The surge in Omicron infections did not factor into the latest production outlook, but it is, nonetheless, a concern for Toyota, Kamakura said. Toyota’s business year runs from April to March.
Covid-19 lockdown restrictions last year disrupted supplies of components. Toyota halted production at a facility in Tianjin earlier this month after a Covid-19 outbreak.
The carmaker also briefly halted production at two domestic factories due to a shortage of components from Southeast Asia.
The maker of the Corolla compact sedan said it will build 700,000 cars globally in February, more than last year, but 150,000 fewer than it had initially planned.
In North America, Toyota forecasts a reduction of about 25,000 to 30,000 vehicles in February.
To reach its annual 9 million production target, set in September, Toyota would have to build 1 million vehicles in March.
While Capital Economics Japan economist Tom Learmouth said Toyota’s new target was a “trivial downward revision”, the threat of “renewed supply chain disruption there is a downside risk to our upbeat outlook for Japanese car production”.
- Reuters with additional editing by George Russell
READ MORE:
Toyota Overtakes GM in Annual US Sales – WSJ
Toyota to Splash $35bn on 30 EV Line-Up by 2030
Toyota, Honda Hit with Patent Suits by US Firm – Nikkei
