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Toyota and the Horror Chip Shortage: Five Plants Closed, Car Production Going Down
Despite all the optimistic forecasts that projected a substantial recovery in terms of global chip inventory in the second half of 2022, it’s becoming more and more obvious that such a scenario is very unlikely to happen.

Toyota and the Horror Chip Shortage: Five Plants Closed, Car Production Going Down

Toyota's European Manufacturing Plants and OperationsToyota's European Manufacturing Plants and OperationsToyota's European Manufacturing Plants and OperationsToyota's European Manufacturing Plants and OperationsToyota's European Manufacturing Plants and Operations
This means the chip crisis was, is, and will continue to be a major nightmare for all carmakers across the world despite all their efforts to secure the necessary supply in the short term.

Toyota, for instance, has recently reported a record August, explaining that its attempts to reduce the disruptions caused by the semiconductor shortage paid off in August when the company recorded a significant bump in terms of sales and production versus the same month in 2021.

But this doesn’t necessarily mean that the chip crisis is over, and Toyota can return to the pre-2020 production levels. Not at all, and the recent announcement from the Japanese carmaker confirms the struggle continues.

Toyota starts its latest press announcement by apologizing for the long waiting times that customers have no other option than to accept whenever they purchase a new car. However, the Japanese firm says the one to blame is the infamous mix of the health crisis and the shortage of parts, including semiconductors.

As a result, the company says, there’s no other way than to adjust the production once again, meaning that fewer cars would roll off the assembly lines in October than originally anticipated.

More specifically, Toyota originally planned to build a total of 800,000 vehicles globally this month, but the company now says that it’s making additional adjustments to its domestic operations, so the number is going down by 50,000 units. In other words, a total of 750,000 vehicles sold by Toyota and its brands should theoretically see daylight in October.

The company says it is temporarily shutting down the production at 5 lines in 5 plants (out of 28 lines and 14 plants) in Japan.

The production suspensions will take place at the Tsutsumi, Tahara, Miyata, Inabe, and Hamura plants (keep in mind that only certain lines at these facilities would be impacted by the new adjustment). However, the production of several models would be affected, including RAV4, Prius, Corolla, Corolla Sport, Camry, Land Cruise Prado, Lexus GX, 4Runner, Lexus LS, IS, RC, RC F, and NX, as well as the Toyota FJ Cruiser.

In other words, if you ordered one of these models, there’s a chance you might have to wait even longer to get your hands on it.

The Japanese carmaker, however, is confident that its production forecast for the fiscal year can still be reached. The company wants to build 9.7 million vehicles, so most likely, Toyota is hoping that the production can be accelerated at a later time to recover the downtime caused by the current lack of semiconductors.

However, this implies a substantial recovery in terms of chip supply, and at this point, opinions are still divided over whether this is possible or not.

General Motors’ CEO, for instance, doesn’t believe the chip nightmare can be resolved this year, and in September, she said that the crisis is very likely to continue through 2023 “and beyond.” It’s the beyond part the one that’s concerning, as more and more industry experts seem to believe that the constrained inventory could remain a problem even after 2023.

Intel previously forecasted that the chip shortage would be resolved earlier than 2024, explaining that other global problems and the lack of various materials would further fuel the crisis and lead to similar production struggles in the short term.

Of course, guessing when the pre-2020 production levels would be restored is rather impossible right now, especially as foundries could encounter further challenges, including the lack of materials and equipment for the manufacturing of chips.

 
 
 
 
 

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