The shortage of parts caused by the coronavirus pandemic is further denting production at Toyota, Japan’s top automaker, Report informs referring to MarketWatch.
Production at 11 plants in Japan will be halted January 21-24, Toyota Motor Corp. said.
That comes on top of reductions planned for February that were announced earlier. Those reductions will be on various days at eight of its 14 plants in Japan, including assembly lines making the Prius hybrid and Lexus luxury models.
Supplies are running short because of a lack of computer chips, which are crucial in auto parts. Plants in and out of Japan have undergone lockdowns and stoppages related to COVID-19 measures. Toyota has not given details.
Production in January will be reduced by 47,000 vehicles, when accounting for the latest changes, according to Toyota. For the fiscal year through March, production will now fall short of the 9 million vehicles the automaker had targeted, despite healthy demand for Toyota offerings. All manufacturers are scrambling to secure the supply of the tight chips, worsening the crunch, Toyota said.
The pandemic has disrupted not only the auto sector but various areas, including shipping, the oil supply and meatpacking, serving as a reminder of the connectivity of the world and the importance of the humblest worker.
Matteo Fini, vice president, who analyzes auto supply chains and technology for IHS Markit, said supply problems aren’t expected to go away for some time, and they are serious, costing manufacturers as much as $50 million a week.
That means the cost-savings from the famous “Toyota Way” of lean manufacturing, based on having as little inventory as possible for “just-in-time” production, may no longer pay off, said Fini.