Toyota Cuts Output Target amid Chip Shortage

Automobile Semiconductor

Toyota Motor Corp. has posted 25 percent drop in its quarterly profit and cut its annual output target, as the company tackles rising material costs and semiconductor shortage. The world’s biggest automobile producer by sales warned that it still remain difficult to predict the future after posting its quarterly decrease in profits, highlighting the strength of chip shortage.

The business environment is rapidly changing such as dramatic changes of foreign exchange rates, increasing material process, and rising interest rates, said Toyota’s chief accounting officer Masahiro Yamamoto. Yamamoto added that the operating profit of Toyota for the three months ending September 2022 dropped to 3.79 billion dollars.

Toyota now expected to manufacture 9.2 million vehicles this year, down from the earlier forecast of 9.7 million vehicles but it is still ahead of the production of 8.6 million vehicles in last financial year.

The global automobile chip shortage continues because of a slow recovery in the supply, as chip producers fight against COVID-19 lockdowns and natural disasters. The global production of Toyota rebounded by 30 percent in the quarter ended in September 2022, but semiconductor shortage and several other components will continue to affect the output in the coming months, warn Toyota.

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