Toyota has problems: what happens to production

Toyota downgraded another 50,000 vehicles in June amid blockages in China.

Toyota has cut its global production plan for June for the second time this week and warned that production estimates for the full year could be reduced, highlighting the pain caused by the supply chain crisis and China’s blockade.

Car production worldwide has been affected by the shortage of microchips and also by Chinese blockages for COVID-19.

Toyota’s decline – generally seen as a benchmark for Japan’s auto industry – comes a day after data showed that passenger car sales in China, Europe and the United States remained weak.

The carmaker said it now expects to produce about 50,000 fewer vehicles in June, for a total of about 800,000, due to the blockade in Shanghai. It has already reduced its plan for the same month by 100,000 vehicles, citing a chip deficit.

The crisis is affecting producers’ output

Toyota said there was a “possibility” of reducing its annual production plan by 9.7 million vehicles.

“It is very difficult to estimate the current situation of the supply of parts due to the ongoing blockade in Shanghai,” the statement said.

This lack of certainty about parts has been a constant refrain for carmakers, both in Japan and elsewhere. Given that China is both the world’s largest car market and a global giant in production, blockages there have implications for both demand and supply, analysts said.

This month, Subaru warned that US Dealers have a record stock of about 5,000 remaining vehicles, while Honda said it would reduce production by 20% at two domestic plants.

Toyota said its Corolla, RAV4, Prius and 4Runner models will be among those affected by the production suspension.