Toyota Will Reduce Global Production By 40 Percent, What Causes It?

Toyota Illustration (Photo: Pixabay)

JAKARTA - Toyota plans to cut world car production by up to 40 percent starting in September 2021. Due to the shortage of semiconductor chips supply, there is no sign of abating. Even a sign of the best supply chain is affected by the shortage.

The scarcity of chips also makes the price in the market rise up to 600 percent. In fact, this condition has been exacerbated by the lack of a resurgence in the world automotive industry, which has been hit hard by the COVID-19 pandemic. Moreover, the regional quarantine policy (lockdown) which is applied by almost all countries has caused distribution problems for chip shipments.

"After being forced to close factories last year due to the pandemic, automakers now face stiff competition from the broad consumer electronics industry for chip shipments amid global supply chain disruptions," the company said in a statement.

The outbreak of COVID-19 and the regional quarantine policies in Japan, the Philippines, Thailand, Vietnam, and Malaysia have also hit production even more. Because, most of Toyota's factories are in that country.

"The company will cut global production for September by two-fifths from its previous plan, affecting 14 factories in Japan and elsewhere, including most of its plants in North America," he said.

For your information, due to the scarcity of chips also hit the automotive industry in the UK. In fact, this problem has caused car production to plummet to its lowest point since 1956. Executive Director of the Society of Motor Manufacturers and Traders (SMMT), Mike Hawes said British car manufacturers are still facing very difficult conditions.

Recorded in July, production was only 53,400 units or decreased by 37.6 percent compared to the same period in 2020. Although the demand for new cars is still high, said Mike, manufacturers cannot fulfill it due to supply chain constraints from overseas for car components due to the lockdown policy.