Toyota to cut production 40% in October because of the chip shortage.

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Toyota to cut production 40% in October because of the chip shortage.

An employee works on a Yaris car at the Toyota car factory in Onnaing, France.Credit…Michel Spingler/Associated Press

Sept. 10, 2021, 1:10 p.m. ET

Toyota Motor said on Friday that it will make about 40 percent fewer cars and trucks around the world in October as a result of complications from a shortage of computer chips and Covid-19 restrictions affecting the production of parts in Southeast Asia.

It will be the second month in a row that Toyota, the world’s largest automaker by the number of cars and trucks sold, has slashed production because of the shortage and the pandemic. It is the latest sign that the auto industry could be hamstrung by the chip shortage well into 2022.

In a statement, Toyota said it now expects to produce 330,000 fewer vehicles in October than it had previously planned. Its North American operations would likely see production lowered by 60,000 to 80,000 vehicles in October. The company also said global output in September would fall about 70,000 vehicles short of previously lowered production targets.

“Key reasons for the production adjustment include a decline in operations at several local suppliers due to the prolonged spread of Covid-19 in Southeast Asia and the impact of tighter semiconductor supplies,” the automaker said. “Although our plants and suppliers are taking thorough quarantine and vaccination measures in response to the pandemic in Southeast Asia, the spread of Covid-19 infections remains unpredictable, making it difficult to maintain operations due to lockdowns at various locations.”

For the fiscal year ending March 31, Toyota now expects to produce nine million cars and trucks, down from an earlier estimate of 9.3 million.

Until recently, Toyota had weathered the chip shortage better than many other automakers because of its close ties with suppliers and its large stockpile of parts and components. Most automakers had forecast that the chip shortage would ease in the second half of this year. Yet, companies are still being forced to slow output and temporarily idle plants.

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