In an effort to ease the pain for its supplier base, Toyota plans to reduce production at its Japanese factories during the second quarter of this year.
A spokesperson told Reuters that the automaker intends to cut production at its Japanese plants by 20% in April, 10% in May, and 5% in June. The production cut is aimed at relieving pressure on suppliers.
Akio Toyoda, CEO of Toyota, reportedly told union members that the slowdown from April to June was an intentionally cooling period for suppliers who were at risk of being “exhausted” due to the shortage of chips and parts.
However, the spokesperson noted that production levels would remain high as Toyota’s previous plan required the company to produce 11 million cars during the fiscal year 2022, ending in late March 2022.
In the calendar year 2021, Toyota claimed the crown for global sales by selling 10.3 million cars, a 10.2% increase from 2020, and 1.7 million vehicles ahead of its closest rival, the Volkswagen Group.
Toyota had increased its production forecast for 2022 to make up for production losses during the COVID-19 pandemic and the subsequent global semiconductor shortage.
While these issues have persisted for over a year and continue to impact manufacturers of all kinds, supply chains have been further disrupted by Russia’s invasion of Ukraine.
It’s unclear how the production slowdown will affect Toyota’s production levels for 2022 or if the automaker plans to compensate by increasing production rates in the second half of the year.
Earlier this month, Toyota had to shut down all domestic vehicle production for a day after a supplier disconnected a server due to a computer virus.
Toyota is far from the only automaker struggling to maintain production due to supply chain issues. Honda recently announced a 10% production cut at two Japanese factories until the end of March.
After reporting a loss of $2.5 billion for the last quarter of 2021, Rivian revealed last week that supply chain issues could halve its 2022 production to 25,000 vehicles.
Meanwhile, Russia’s invasion of Ukraine has severely impacted the production of several European manufacturers. Volkswagen halted production at its two electric vehicle factories in Germany, while Stellantis canceled plans to use its joint venture factory with Mitsubishi in Russia as a hub for van manufacturing.
