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Toyota’s Sales Take a Dip Owing to Industry-Wide Chip Shortage, Net Profit Falls by 5%

Japanese auto giant Toyota’s profit sagged 5.6% in 2021 compared to the same period in the previous year. According to the automaker, the dip was mainly due to the industry-wide chip crisis and the global health crisis.
Toyota Production Plant 8 photos
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According to the GR Yaris automaker, it cut its annual production target by 500,000 cars, to 8,5 million units in total.

Toyota is not the only big carmaker suffering profit dents caused by the health crisis and chip shortage. GM, Ford, Nissan, Daimler, BMW, and Honda all recorded reduced production and supply chain issues instigated by the worldwide semiconductor shortage.

The best-selling car manufacturer’s profit for the last three months of 2021 fell to $6.9 billion (781.7 yen) from the previous year’s 7.26 Billion (838.7 yen). Toyota's quarterly sales slumped 5% to $63 billion, AP News reported.

Auto insiders speculate that the industry-wide shortage might continue well into 2022. According to the U.S. Commerce Secretary, the semiconductor shortage could struggle over this year since fixing the already constrained supply is impossible overnight.

General Motors, on the other hand, feels optimistic about the situation. In a letter to shareholders, CEO Mary Bara expressed optimism, stating an improved outlook for the elusive microchips in the U.S. and China. They expect more robust results in 2022.

Last year, Toyota reduced its global vehicle production numbers by 40% due to the chip shortage. According to Toyota officials, the chip shortage could extend into 2023. In a statement, the automaker apologized to its clients due to production volume reductions and promised to restore total production soon.

The automaker warned its Japanese market clients that they might have to wait up to four years to take delivery of its latest Land Cruiser SUV. It did not issue a statement explaining the reason behind the delay.

At the beginning of the year,Toyota widened its gap from rival Volkswagen, fortifying its position as the world’s largest car seller.

Editor's note: Images featured are for illustration purposes

 
 
 
 
 

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