Toyota Motor (NYSE:TM) Corp will produce 500,000 fewer vehicles than previously thought this financial year, predominantly due to chip shortages at factories following the pandemic’s effect on global supply chains.
The world’s largest carmaker added that Covid and staff absences had also had an effect as it revised down its production target to 8.5mln from 9mln vehicles for the year ended 31 March, 2022.
Like most global carmakers, Toyota has been forced to cut output following a shortage of semiconductors, which help improve engine efficiency and reduce emissions, due to the pandemic’s impact on supply chains.
Toyota is consistently in the 'top 10' for car sales in the UK, according to the Society of Motor Manufacturers and Traders (SMMT).
The Japanese company thought it had the capabilities to produce 9.3mln vehicles this year approximately a year ago, but this new target represents some 800,000 less.
Chip shortages have been compounded by the new wave of omicron cases around Christmas.
Restrictions on movement and staff absences generally had affected Japan’s 16 factories and two in Derbyshire and Deeside, Wales, it said.
The Japanese government this week further tightened their Covid-related restrictions on growing omicron concerns.
Toyota has tried to offset the lower sales through higher prices of its vehicles in China, Europe, and the US, while the recently weaker yen (Japanese currency) strengthened overseas’ earnings when translated into yen.
Profits were down by a fifth in the final quarter of 2021 but Toyota insists it can achieve its full-year prediction of £15.9bn.
Shares rose 0.9% on the news.