Toyota Motor announced that its production forecast for the fiscal year is expected to be lower than the previous forecast of 9 million units. The Japanese automaker Toyota (ticker: TM) secured a remarkable feat in 2021 when it sold more cars in the U.S. than General Motors (ticker: GM) for the first time. In February, Toyota announced that its production plan is expected to be around 700,000 units.
The company announced that it expects robust demand and is therefore aiming for a high February production plan adding that the semi-conductor shortage experienced across the board forced the company to adjust its production plan to around 150,000 globally.
Toyota said that it expects to miss its production target due to the double challenge presented by both the semi-conductor shortage and the issues caused by a continuing global pandemic. “As a result of the revision, the full-year production forecast for the fiscal year ended March 31, 2022, is expected to be lower than the previous forecast of 9 million units,” Toyota said.
Regarding the Semi-conductor shortage, Toyota explained that they would continue to examine the situation and consult with all companies involved in considering the utilization of substitutes where possible in anticipation of a continuing shortage.
Kazunari Kumakura, Toyota’s global procurement manager, commented after the announcement that achieving 9 million would mean ensuring the production of over 1 million units in March alone- a near-impossible feat. Kumakura said, “It will be very challenging for us to achieve the target.”
Toyota initially began the current fiscal year with a target of 9.3 million vehicles in the 12 months ending March 31. The industry found itself confused by Toyota’s decision to boost output and then eventually surpass its sales targets amidst a global pandemic and chip shortage. However, over the recent months, the crises finally caught up with the company, forcing it to copy its rivals and pull production back.
The automaker also announced that it would temporarily halt operations in Japan on certain days at 11 lines in eight plants, out of 28 lines in 14 plants. The slowdowns are expected to affect the output of nameplates like the Prius, RAV4, C-HR and Camry, plus Lexus models, including the LS and IS sedans and NX and UX crossovers. American depositary receipts of Toyota fell 0.33% in premarket trading to $209.99.