Amid the soaring material cost and semiconductor shortage, Toyota Motor Corp slashed its target output as its profit fell by 25%.
Despite faring better than most of its competitors during the pandemic, Toyota has succumbed to a persistent chip shortage this year, which ultimately forced them to cut output targets repeatedly.
Last week, Toyota stated that its global production rose by 30% in the July-September quarter. However, they warned that the scarce supply of semiconductors and other components might hinder their output in the coming months after posting a profit decline for the fourth consecutive time.
According to Toyota’s chief accounting officer Masahiro Yamamoto, “The business environment is changing dramatically such as the rapid changes of foreign exchange rates, raising interest rates, soaring materials prices, and more.”
In the July-September quarter, Toyota’s operating profit dropped to 562.7 billion yen ($3.79 billion), which was 209.5 short of the last estimate of 772.2 billion yen.
Last month, Toyota announced that they were unlikely to meet the 9.7 million vehicle production objective and ultimately cutting the target to 9.2 million vehicles on Tuesday.
Toyota’s limited production of smart keys
Toyota announced last week that they would limit the number of smart keys due to the scarce supply of semiconductors.
“As the shortage of semiconductors continues, this is a provisional measure aimed at delivering cars to customers as quickly as possible,” the company stated. “As for the second smart key, we plan to hand it over as soon as it is ready.”
These changes are set to apply to 14 models of Toyotas, including the Lexus models.
In an email, Toyota mentioned that they would temporarily provide one smart key for specific vehicles in North America. Meanwhile, the manufacturing, logistics, and sales teams will develop countermeasures to lessen the change’s impact on its customers.
