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As a wave of coronavirus cases spread in Southeast Asia and the chip shortage that hinders the auto industry has worsened, the world’s two largest automakers announced new disruptions in their assembly lines.
Toyota, the world’s largest automaker, said it will cut its global production by 40% in September. Ford, headquartered in the United States, said that starting Monday, one of its factories will stop assembling its F-150 pickup trucks for a week.
The Japanese group said on Thursday that it will produce 540,000 vehicles next month, down from the original plan of 900,000 vehicles.
Almost all of its factories in Japan will be hit, and 27 production lines will be disrupted. The production of the company’s global operations will be affected, with plants in North America and China each designated to deliver 80,000 fewer cars than expected. In Europe, production will be reduced by 40,000 vehicles from the original plan.
Toyota executives said the sudden increase in coronavirus cases in Vietnam and Malaysia has exacerbated the semiconductor shortage and left the group lacking other auto parts for its global network.
These two countries play a key role in the production of electronic products and packaging and testing components, which are used in everything from automobiles to smartphones. Toyota’s largest manufacturing center in Southeast Asia is located in Thailand, which is also struggling with a record number of Covid cases and production cuts.
Toyota’s head of global procurement, Kazunari Kumakura, said: “It is difficult to ensure the necessary quantity of several parts, which led to this sudden large-scale reduction in production.”
On the Ford F-150 production line in Kansas City, Missouri, the automaker will cancel overtime work this weekend and will “suspend work during the week of August 23 due to the shortage of semiconductor-related parts due to the Covid-19 pandemic in Malaysia”, “Manufacturing and labor communications manager Kelli Felker told the Financial Times.
Toyota’s layoffs are a major setback for the Japanese company, which has managed to barely maintain Record profit Despite the pandemic and chip shortages, this has hit some competitors even harder.
After the news, Toyota shares fell 4.4%. Nikkei Report.
So far, Toyota has succeeded in getting rid of the most serious shortage with its large chip inventory and supply chain management skills honed in past natural disasters.
The automaker declined to comment on which parts are facing shortages. However, the company stated that it has taken production cuts into account and adhered to its guidelines for global production of 9.3 million vehicles in the fiscal year ending in March.
Toyota’s move is after Chinese automaker Geely warn this week Continuous “uncertainty” Due to the chip crisis, it revolves around production. Jaguar Land Rover halved its sales forecast last month, blaming it for a lack of semiconductors.