Parts shortages continue to bite for Toyota with risks to profit outlook rising, says GlobalData

Following the news that Toyota is planning further big cuts to global output plans for September (minus 70,000-units on previous plan) and October (minus 330,000 units on previous plan);

David Leggett, Automotive Analyst at GlobalData, a leading data and analytics company, offers his view:

“Shortages of semiconductors and other parts from Toyota’s low-cost supply chain in southeast Asia continue to bite.

“The recent upsurge in Covid-19 infections in southeast Asia and its impact on Toyota’s supply chain continues to disrupt parts supply with severe impacts into October. As the latest downward September adjustment shows, October’s output plan could be revised again and the outlook for November’s plan is unpredictable – Toyota acknowledging that, too, but leaving November’s plan unchanged for now.

“While Toyota maintains that its profit outlook for the current fiscal year is unchanged on ‘very strong’ demand for its products, that could change if supply chain disruption in Asia worsens, and high levels of planned output are lost beyond today’s announcement.

“As the crisis persists, costs rise for Toyota in working to transfer production to other regions alongside the fear that a rising proportion of accumulated lost sales won’t be recouped later on.”

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