Toyota is reducing production in Japan and North America due to chip shortages

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Toyota said Thursday that it will reduce production In Japan and North America, due to the lack of semiconductor chips, which is a sign that the shortage affects even the best performing supply chains.

In Japan, the carmaker will cut production by 40 percent later this month and September, affecting most of its production lines. Wall Street Journal reported; The planned reductions in North America are 40 to 60 percent in August. The reductions mean Toyota produces 60,000 to 90,000 fewer vehicles.

“Due to unforeseen events in COVID-19 and our supply chain, Toyota has an additional shortage that will affect production at most of our North American plants,” the company said in a statement. “While the situation remains smooth and complex, our production and supply chain teams have worked hard to develop countermeasures to minimize the impact of production.” The company does not expect production disruptions to affect the number of employees.

“We sincerely apologize for the inconvenience to our customers and suppliers,” the company said.

Toyota is the latest automaker to change its production plans due to a semiconductor shortage due to COVID-19 problems at chip factories. Volkswagen also said on Thursday it may have to cut production due to chip shortages, and both Ford and General Motors said in the spring when they were idling or continuing downtime at several of their North American plants. Tesla, meanwhile, said in July that it was rewrite the software of their vehicles to support alternative chips. But Tesla CEO Elon Musk said during the earnings call that “the global chip shortage situation remains serious”.

So far, Toyota had been mostly protected from the lack of chips; like WSJ stated in May Toyota made adjustments famously to its efficient supply chain to try to adapt. But because the coronavirus delta variant is leading to an increase in infections worldwide, chip production is likely to remain slow.

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