Toyota Motor Corp will reduce global production for September by 40% from its previous plan, the Nikkei business daily reported today, the last major automaker to cut production due to critical shortages of semiconductors.
Toyota has fared better than rivals, having built a larger stockpile of chips due to a business continuity plan revamped in the wake of the 2011 Fukushima earthquake.
But a resurgence in Covid-19 cases across Asia has compounded the semiconductor crunch.
Shares in the world's largest automaker by sales volume slid on the report, ending down 4.4% in their biggest daily drop since December 2018 and pulling the benchmark Nikkei average to a seven-month low.
Toyota had been aiming to make a little under 900,000 vehicles in September, but has reduced that to about 500,000, according to the Nikkei.
A company representative said checks were being made on the report.
Toyota said this month it was facing an unpredictable business environment due to fresh Covid-19 cases in emerging economies, the semiconductor shortage and soaring material prices.
Even so, it maintained its forecast to sell 8.7 million cars globally for the year ending in March.
Starting early next month, Toyota will temporarily suspend production lines at domestic factories including its Takaoka plant in Aichi Prefecture, the Nikkei said.
It added that production in North America, China and Europe will also likely be scaled back by tens of thousands of units.
The car maker had already halted assembly lines at some domestic factories from late July to early August, including its Tahara plant, due to a surge in Covid-19 infections in Vietnam which had constrained the supply of parts, the Nikkei said.
A person familiar with the matter told Reuters this month that Toyota has suspended production at one assembly line in Guangzhou, China, which it operates with its Chinese joint-venture partner Guangzhou Automobile Group.
In Thailand too, Toyota suspended production last month at three factories due to a pandemic-related parts shortage.
Meanwhile, Volkswagen may need to cut production further due to a semiconductor supply crunch, the German carmaker said today.
"We currently expect supply of chips in the third quarter to be very volatile and tight," Volkswagen, the second biggest carmaker in volume terms behind Toyota, said in answer to a request for comment by Reuters.
"We can't rule out further changes to production."
The Wolfsburg-based carmaker said it expects the situation to improve by the end of the year and aims to make up for production shortfalls in the second half as far as possible.
Shares in European carmakers and suppliers were broadly weaker across the board today with BMW, Daimler, Renault, Stellantis and Volkswagen all down by more than 2%.
The latest production woes follow news that German chipmaker Infineon, the top automotive supplier, had been forced to suspend production at one of its plants in Malaysia in June due to a coronavirus outbreak.
Infineon CEO Reinhard Ploss said on August 3 that the automotive industry faced "acute supply limitations across the entire value chain" and it would take until well into 2022 for supply and demand to be brought back into balance.