Toyota predicts drop in production target due to lack of chips

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Toyota said on Tuesday that it estimates it will miss its annual production target of nine million vehicles, as competition for semiconductors has meant there isn’t enough to increase car production to make up for lost production during the pandemic last year.

“Reaching the nine million mark will be extremely difficult,” Kazunari Kamakura, an executive at the world’s largest automaker, said during an online briefing. Toyota, he added, could not predict how long the chip shortage would last.

Toyota and other automakers have been forced to reduce production even as demand recovers in key markets such as China.

The rise in infections by the omicron variant did not take into account the latest production prospects, but is nevertheless a concern for Toyota, Kamakura said. Toyota’s business year runs from April to March.

The Covid-19 lockdown measures last year disrupted the supply of components from factories in Southeast Asia.

The automaker said it will build 700,000 cars globally in February, more than last year but 150,000 fewer than it had initially planned.

To reach its annual production target of nine million, set in September, Toyota would have to build one million vehicles in March.

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