How chip shortage is forcing the world’s biggest automobile company to shut factories

After the end of the second phase of the coronavirus crisis, the demand for cars in the country is increasing continuously. But due to the shortage of semiconductors, the companies cannot react to the expected target.

Toyota, one of the biggest vehicle manufacturers globally, is also affected by the chip shortage. The global chip shortage has earlier forced to stall Toyota’s 27 production lines in 14 factories worldwide in September. The auto manufacturer giant has now extended stoppages at some factories in Japan due to a supply shortage. The company claims that the halts on production will directly affect about 14,000 vehicles in December.

Earlier, the company said that it hopes to return to average production for the first time in seven months in December. But the production at the factories was halted, and the suspension is expected to continue for now. The company claimed to lose 3,500 vehicles due to the chip shortage. In addition, it will keep its target to produce 9 million vehicles worldwide during the financial year ending on March 31.

The production cuts which have affected the Lexus models and its Land Cruiser are still trying to make up for the production lost due to the supply-chain disruptions in Malaysia and Vietnam.

To recall, the Japanese automaker revealed that it produced 627,452 vehicles in October, down from 845,107 units a year earlier. Toyota said last month that it would cut global production for a third time this year as the worldwide shortage of automotive microchips continues to bite.

According to the automobile industry body SIAM, deliveries of small cars and sedans stood at 64,235 units in September. It has been 61% weaker than 1.6 lakh units in September last year. If we talk about SUV and UV, their wholesale sales have fallen by 9% to 87,720 units compared to 96,633 units in September last year.

The post How chip shortage is forcing the world’s biggest automobile company to shut factories appeared first on BGR India.

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