Affected By Semiconductor Crisis, Multinational Toyota Claims It Will Not Achieve Its Production Target

The Estimate by Multinational Toyota to Produce 9 Million Cars Will Unfortunately Be Interrupted by the Ongoing Semiconductor Crisis, Which Has Lasted Since Last Year

Toyota announced that its vehicle production this fiscal year, which ends in March, is expected to be lower than estimated due to the ongoing semiconductor crisis, which is affecting the entire automotive industry. In a statement released this Tuesday (18), the Japanese multinational explained that it will likely not reach the target of 9 million cars and that it needed to reduce the expected global manufacturing for next month by approximately 150,000 units, to 700,000 cars.

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Semiconductor Crisis Forces Toyota to Suspend Production at All Its Plants

The multinational Toyota emphasizes that adjustments to production plans have been hindered by the lack of parts, which occurred due to the spread of COVID-19 worldwide.

The company suspended the production of some of its units and stated that it will continue to monitor the situation and consult with involved companies, in order to make possible replacements in light of the ongoing semiconductor crisis. The multinational started the fiscal year optimistic, challenging its competitors and recording record profits despite early signs of the semiconductor crisis.

However, in the middle of last year, the winds changed, and the brand, like many others, felt the impact of the parts shortage, being forced to make deep alterations to its production plans.

Check the Models Affected by the Global Semiconductor Crisis

The shutdowns impacted the company’s factories worldwide, including its domestic plants in Porto Feliz and Sorocaba. The most recent cuts, made in Japan, directly affect the production of models such as Toyota Prius, C-HR, RAV4, and Camry, as well as luxury division vehicles like the LS and IS sedans and the NX and UX crossovers.

Although there is still a significant semiconductor crisis, the multinational Toyota recorded a considerable 48% increase in operating profit in the second fiscal quarter, from July to September.

The result was achieved due to aggressive cost control and favorable exchange rates. It is no surprise that the brand raised its full-year profit forecasts to nearly record levels, even while reducing sales projections. Despite the crisis, the Japanese company continued to innovate and launched several models, such as the Toyota C+pod, which has a range of 150 km and a top speed of 60 km, targeting teenagers and the elderly.

Automotive Sector Still Relies on Semiconductors to Boost Production

The recovery of the automotive sector depends mainly on the easing of the semiconductor shortage that began in 2020. Every digital product requires chips, which are not exactly identical but are generally produced by the same suppliers.

With the onset of the pandemic, the chip supply chain was disrupted due to COVID outbreaks in places like Malaysia, one of the major suppliers of the product. Meanwhile, demand expanded, driven by the search for large screens, cell phones, among others.

When production began to recover, it focused on the technology industry, which is one of the largest buyers, considering that automakers are not significant clients for the sector.