Toyota’s Output Drops By 26% Due To Ongoing Supply Hiccups

Toyota’s Output Drops By 26% Due To Ongoing Supply Hiccups

Production of models like the Toyota Land Cruiser and Lexus NX have been hit hard by ongoing supply chain issues in South-East Asia. This problem is industry-wide. Toyota’s global output fell by 26% in October compared to 2020 as a shortage of semiconductors and other critical components continued to cause supply-chain hiccups for automakers.

Toyota said this week that it produced 627,452 vehicles in October, significantly down from the 845,107 units it built this time last year. Global sales also plummeted 20% for the month to 677,564 units.

Japanese carmakers have tried to restore production levels caused by the coronavirus pandemic, but most are finding it an uphill struggle. According to one industry source, the chip crunch is expected to cost the car industry some $210 billion in lost sales this year. Still, some companies such as Toyota and Nissan have raised their earnings outlooks, thanks to strong demand for new hybrids and compact cars.

A Toyota spokesperson said that the carmaker is confident its production levels will return to pre-pandemic numbers soon. Japan’s No 1 carmaker is planning to produce 850,000 to 900,000 units in November, and further boost output in early 2022. It also raised its annual operating profit to ¥2.8 trillion ($24.6 billion) earlier this month, up from ¥2.5 trillion announced in August.

The supply chain hiccups have led to delivery delays for models like the Land Cruiser, for example, by as much as two years. Order one today and you won’t pick it up until mid-2023.

One commentator explains that Toyota is expected to start catching up with delayed production from January 2022.