Toyota Motor Corp said on Tuesday its July global vehicle output fell 8.6% from a year earlier, missing its target for a fourth straight month, as the COVID-19 outbreak, inclement weather and a recall investigation at the expense of persistent chip shortages hurt output. A sustained weakness in the world’s biggest carmaker’s overall performance by sales in July raised concerns that Toyota may have to cut its annual production target of 9.7 million vehicles even as China rolls back pandemic restrictions and chip shortages show some signs of easing.
Toyota produced 706,547 vehicles globally last month, below its target of around 800,000 units and last year’s output of 773,135 vehicles. Production in the first four months of the current fiscal year, which began in April, fell 10.3% from the original plan. The global auto industry has weathered supply chain disruptions caused by chip shortages and China’s strict COVID restrictions, but Toyota has also struggled with heavy rain in Japan, a production line shutdown to investigate recalls and a coronavirus outbreak at a local factory.
Toyota said domestic output fell 28.2%, outweighing July’s record overseas output, up 4.5%, driven by a strong recovery in Europe, China and the rest of Asia.”In August this year, Toyota plans to produce about 700,000 vehicles, and given that it produced about 530,000 vehicles last August, I think the situation is starting to improve,” said Seiji Sugiura, chief analyst at Tokai Tokyo Research Institute. Eager for a strong comeback, the company said earlier this month it would stick to its annual production target as it plans to ramp up production through November, depending on parts and personnel supplies. It expects production to return to about 850,000 vehicles in September, a record for the month.
Still, Sugiura said Toyota is not out of the woods just yet, citing uncertainty over stable chip purchases as a risk and expressing skepticism that the company could stick to the 9.7 million production target.”Regarding the recovery from the situation in the first half, I believe that in the second half the company will probably set a monthly production level of 800,000 or 850,000 units per month. If the production exceeds 800,000 units in a single month, it will be a record.” he said.
