Toyota Motor said on Tuesday that its July global vehicle production fell 8.6% from a year earlier, the fourth straight month of underperformance, hampered by Covid-19 outbreaks, severe weather, a lawsuit involving recall and a persistent shortage of chips.
The July maintenance of weak production numbers raised concerns that Toyota may have to reduce its annual manufacturing target of 9.7 million vehicles.
The move would come even as pandemic-related restrictions in China have eased and the chip shortage has shown some signs of improvement.
Toyota, the world’s biggest automaker by sales, produced 706,547 vehicles worldwide last month, below its target of about 800,000 units. In the same period of the previous year, there were 773,135 units.
Production in the first four months of the current fiscal year, which began in April, was 10.3% below the initial plan.
The global auto industry has weathered supply chain disruptions caused by chip shortages and strict Covid-19 restrictions in China, but Toyota is also dealing with heavy rains in Japan, production line disruption due to a recall investigation and coronavirus outbreaks at a local factory.
Toyota said domestic production fell 28.2%, edging out July’s record overseas production, up 4.5%, given a strong recovery in Europe, China and the rest of Asia.
“As of August this year, Toyota is planning to produce around 700,000 vehicles, and considering it made around 530,000 in August of last year, I think the situation is starting to improve,” said Seiji Sugiura, a senior analyst at Tokai Tokyo Research Institute. .
The company earlier this month stuck to its annual production target as it planned to ramp up through November, depending on parts supplies and personnel. Toyota expects September production to recover to around 850,000 vehicles, a record for the month.
Still, Sugiura said Toyota was not out of the woods yet, citing uncertainty over stability in chip buying as a risk and expressing skepticism that the company could meet its production target of 9.7 million units.
Source: CNN Brasil
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