Once again, Toyota announced that it was forced to cut production in July. The drop is significant as it reaches 8.6%. This is the fourth consecutive month that the Japanese giant is forced to do so.
This time, the reasons are multiple as the company is afflicted from everywhere. Basically, COVID-19 outbreaks, bad weather, a recall investigation, in addition to a persistent chip shortage, have hurt production.
The decline in production that continued in July may force Toyota to revise its annual target of 9.7 million vehicles produced.
In terms of more specific numbers, Toyota produced 706,547 vehicles worldwide last month, below its target of about 800,000 units. Last year, for the same period, the company produced 773,135 units.
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Production in the first four months of the current fiscal year, which began in April, was 10.3 percent below the original plan.
The global auto industry has weathered this kind of supply chain disruption caused by the chip shortage and China's strict COVID-19 restrictions. In addition, Toyota has had to deal with heavy rain in Japan, a production line shutdown due to a recall investigation and coronavirus outbreaks at a local plant.
In August, Toyota hopes to assemble 700,000 vehicles compared to 530,000 in August last year. If the situation really improves, we will see the first sign of recovery. Eager to maintain its targets, it could push production capacity to 850,000 units the following month.
The company remains very optimistic. It believes that by the time we get to 2023, we will feel like we are back to normal in all respects.