Toyota's July global vehicle production falls again, annual target in doubt

Toyota Motor Corp said on Tuesday its July global vehicle production fell 8.6% year-on-year, missing its target for a fourth straight month, as COVID outbreaks, severe weather and a recall investigation as well as an ongoing chip shortage hurt production.

The continued weakness in the overall performance of the world's largest automaker by sales in July raised concerns that Toyota may be forced to lower its annual production target of 9.7 million vehicles, despite China withdrawing pandemic restrictions and the chip shortage showing some signs of easing. Toyota produced 706,547 vehicles worldwide last month, falling short of its target of nearly 800,000 units and its production of 773,135 units at the start of the year. Production in the first four months of the current fiscal year, which began in April, was 10.3% behind its original plan. The global auto industry has weathered supply chain disruptions caused by chip shortages and China's strict COVID restrictions, but Toyota is also dealing with heavy rain in Japan, a production line shutdown due to a recall investigation and coronavirus outbreaks at a local plant. Toyota said domestic production fell 28.2%, outweighed by a strong recovery in Europe, China and the rest of Asia, and outweighed overseas output for July, which rose 4.5% to a record high. "Toyota plans to produce about 700,000 vehicles in August this year, and considering it produced about 530,000 vehicles in August last year, I think the situation is starting to improve," said Seiji Sugiura, senior analyst at Tokai Tokyo Research Institute. Eager to make a strong comeback, the company said earlier this month it would stick to its annual production target as it plans to ramp up production through November, depending on parts and personnel supply. The company expects September production to hit a record high of around 850,000 vehicles. Still, Sugiura said Toyota is not out of the woods yet, citing uncertainty over stable chip supply as a risk and expressing doubt that the company can stick to its 9.7 million production target. "In terms of the recovery of the situation in the first half of the year, I believe that in the second half of the year the company will probably set the monthly production level at 800,000 or 850,000 units per month. If production exceeds 800,000 units in a single month, it will be a record," he said. 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!