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Toyota to cut global production by 40pc

Big hit: The worsening COVID-19 situation in South-East Asia is starting to cause more problems for Toyota with global production to be cut by 40 per cent.

Production pinch of COVID-19 felt by Toyota and Lexus, among other brands

23 Aug 2021

THE world’s most valued car manufacturer, Toyota, has announced it will be cutting its global production by 40 per cent next month as the ongoing semiconductor shortage continues to cripple the auto industry.


According to a report published last week by Automotive News, Toyota Motor North America is set to lose up to 170,000 units in the shutdowns, while 27 out of 28 production lines across 14 plants in Japan will have production suspended at some point between now and October.


What exactly this means for the Australia market however remains to be seen as the local arm of Toyota is keeping its cards particularly close to its chest, telling GoAutothe Japanese shutdowns were caused by COVID restrictions in South-East Asia, although no mention was made of the US, where the Kluger large SUV is made.


“Toyota Australia has been advised that vehicle production plants in Japan will be impacted in August and into September, caused by parts shortages resulting from COVID-19 restrictions in South-East Asia,” a spokesperson said.


“We are working closely with our global production team to work through the impact on Australia and to support our customers.”


Last month GoAutoreported that local supply of the HiLux and Fortuner could already be under threat, along with the Camry, Corolla, Yaris, and C-HR given the recent Thai production halts caused by a shortage of wiring harnesses.


Now, with these new production suspensions in Japan, it seems that every model in Toyota Australia’s local range is about to be in short, or at least reduced, supply – including the new 300 Series LandCruiser as well as the entire Lexus portfolio.


Unlike Toyota, Lexus sources all its locally delivered vehicles from Japan, with most models facing a month-long (September) production delay.


A lot like its mainstream cousin, Lexus Australia was coy about discussing possible delivery impacts and existing stock levels, instead reiterating what Toyota said about being made aware of the impending shutdowns.


“The needs of our customers remain paramount while we work to determine the impact on Australia,” a local spokesperson said.


According to Automotive News, the Japanese shutdowns will result in 140,000 fewer vehicles rolling off the production lines in September, in addition to the estimated 20,000 units lost this month (not including Lexus).


“We have factored in risk factors in our annual plan. But as for September, the impact came sooner and deeper than expected,” Toyota chief communications officer Jun Nagata said in the report.


Toyota global procurement manager Kazunari Kumakura added that there were still ongoing supply chain risks, but said the brand would “like to recover” as much as it can and was still aiming to produce 9.3 million units globally.


Other brands identified to have been feeling the pinch globally include Nissan and Volvo, however at this stage it appears both brands have avoided any supply issues Down Under.


Nissan’s most recent shutdown centred around its Smyrna plant in Tennessee – where its new-generation Pathfinder is being built – and was triggered by a COVID-19 delta variant outbreak at a Malaysian microchip facility.


With the local timing and specification details of the all-new Pathfinder still to be confirmed, a Nissan Australia spokesperson confirmed the shutdown would have no impact on our market.


The Nissan shutdown started on August 16, with production expected to resume on August 30.


As for Volvo, its most recent shutdown only revolves around its Torslanda plant in Gothenburg (Sweden), with operations winding down last fortnight and due to resume early this week.


In terms of an Australian impact, only the XC90 luxury SUV is sourced from the Torslanda plant, with around 80 per cent of Australian-delivered models now assembled in China.


With the XC90 far from being a volume-seller compared to the smaller XC40 or XC60, Volvo Australia PR and corporate director Greg Bosnich said the Gothenburg shutdown had had no known effect on local deliveries or supply “to date”.

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