- Instead of building 900,000 vehicles in September, Toyota said this week it will make around 540,000. It’s the first massive drop for the automaker, which so far has been weathering the pandemic storm relatively well.
- In North America, production in August and September will drop by up to 170,000 vehicles.
- There is one North American plant that will keep running at full steam, and that’s the one that will build the new Tundra, which is finally being updated with a new generation after well over a decade.
Until this point in the pandemic, and despite the troubles other automakers faced with a lack of components, especially semiconductor chips, Toyota has managed to keep its production plants running relatively smoothly. One big reason for this was a strategic shift the automaker made following the Fukushima earthquake and tsunami in 2011. The updated plan relied less on the “just in time” component delivery system Toyota had used for decades and more on stockpiling components for use in emergencies.
As Automotive News wrote in 2016, Toyota’s updated system included a database called Rescue that “stores information about thousands of parts stored at 650,000 supplier sites, helping the automaker bypass bottlenecks when one supplier gets knocked out of commission.” It’s a system that works well until many suppliers, not just one, get knocked out.
Which is why Toyota announced this week that it will dramatically reduce output at its plants around the world, cutting September’s planned production of around 900,000 cars down to 540,000. Speaking on Bloomberg Television this week, Toyota Motor North America (TMNA) executive vice-president of sales Bob Carter said the production issues are not limited to just microchips, even though they’re a big part of the problem. Some production changes will start in August, and Toyota’s North American facilities will build between 140,000 and 170,000 fewer vehicles in these two months. TMNA sent Car and Driver a statement about the situation:
“Due to COVID-19 and unexpected events with our supply chain, Toyota is experiencing additional shortages that will affect production at most of our North American plants. While the situation remains fluid and complex, our manufacturing and supply chain teams have worked diligently to develop countermeasures to minimize the impact on production. In North America, we are projecting a reduction of approximately 60,000 to 90,000 vehicles in August. As for September, we are projecting a reduction of 80,000 vehicles, but the situation remains very fluid. We do not anticipate any impact to employment at this time.”
There is one North American facility that Toyota is not tampering with during this round of production cuts, though, and that’s the San Antonio plant that currently makes the Tacoma and is about to start building the highly anticipated 2022 Tundra. “In order to meet our production timeline and schedule for the new Tundra, we have to finish up current model production by a certain timeline,” Toyota spokeswoman Melissa Sparks told the San Antonio Express News. “If we’re delayed because of chip shortages, we can’t meet those milestones. So that’s the reason we’re prioritizing chips” for the San Antonio plant.
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