Chip crunch forces Toyota to cut September production by 40%

Japanese auto manufacturer Toyota is set to reduce production by 40% in light of a global chip shortage, according to the Nikkei daily.

With the planned cut, Toyota will make just shy of 5,00,000 vehicles in September, as opposed to its original target of 9,00,000.

Microchips are essential for the electronics systems of modern cars, and have been in short supply since the end of last year because of the coronavirus. And with the spread of the more infectious Delta variant in Southeast Asia, Toyota's procurement has been affected even more.


Toyota had no immediate comment.

The Japanese giant's rivals have also been forced to slow or temporarily halt production due to the chip shortage.

When the pandemic hit, carmakers scaled back orders and chipmakers shifted output to consumer electronics as people splurged on equipment to work and relax at home - leaving automakers in a tight situation as demand for vehicles picked up.

From September, Toyota will also scale back production in North America, China and Europe.

The chip crunch and other virus-related supply chain issues have already caused several short suspensions at Toyota's Japanese factories.

The company reported a record first-quarter net profit earlier this month, with strong sales fuelled by the recovery from the coronavirus crisis.

With inputs from AFP.