Automotive Giants Decide to Reduce Production

Honda announced a 40 percent production halt at two automotive plants in Japan and Toyota announced a production halt of up to 12 days for 10 lines at seven plants in Japan. Ford announced that costs will increase by 1 billion dollars due to supply problems, while the company announced that deliveries will be delayed due to parts shortages. "The chip is still a big problem and deadlines are between 48-52 weeks," said Albert Saydam, President of TAYSAD.

Concerns over the recession in Europe and rising energy costs due to Russia's cutting off natural gas shipments have increased the impact on the automotive industry. Ford noted that supply chain problems will increase its costs by 1 billion dollars in the third quarter. Following the announcements, the company's shares fell 12 percent on the New York stock exchange on Tuesday, its highest daily loss since 2011. It was stated that the company delayed deliveries due to parts shortages. In addition, Honda said it would cut car production by up to 40 percent at its two factories in Japan in early October due to supply chain and logistics problems. Toyota, on the other hand, announced that they planned to reduce vehicle production to 800,000 vehicles in October due to semiconductor shortages. Last month, the company announced that they planned to produce 900 thousand vehicles per month between October and November. According to the October production plan, Toyota will suspend production for up to 12 days for 10 lines at seven factories in Japan. Toyota Turkey CEO Ali Haydar Bozkurt said, "We see no indication that the problems in the supply chain are improving. The energy crisis has been added to the ongoing raw material and logistics problems. Therefore, increasing costs may bring price increases to the agenda." Albert Saydam, President of the Association of Vehicle Supply Industrialists (TAYSAD), said, "The halt in production in Europe will affect our exports. Growth is not expected in the automotive sector this year, but my concern is a contraction. The chip crisis has fallen to the background due to demand in Europe, but the chip is still a big problem and deadlines are between 48-52 weeks." Follow Global Economic Developments on Social Media! Click here to follow Ieconomy official Facebook account! Click here to follow Ieconomy official Instagram account! Click here to follow Ieconomy official Twitter account!