Pandemic shows sting in the tail as Toyota slashes output plans, says GlobalData

Following the news that Toyota is planning a reduction to output plans in September, David Leggett, Automotive Analyst at GlobalData, a leading data and analytics company, offers his view:

“Toyota has confirmed that it will reduce output at 15 Japanese manufacturing plants in September due to parts shortages caused by the spread of COVID-19 in southeast Asia.

“Indeed, reports suggest that globally it could be reducing output on previous plans by as much as 40% next month, taking September’s Toyota’s global production total down to around 500,000 units.

“The pandemic is continuing to impact activity in the automotive industry – directly and indirectly. For example, Vietnam’s new vehicle market plunged by over 38% to 14,457 units in July as another coronavirus outbreak affected sales due to government movement control orders.

“Besides Toyota, other manufacturers, too, will be impacted by lower sales in some markets – such as those in southeast Asia – and by parts supply difficulties on top of problems already baked in with ongoing semiconductor shortages.

“The latest news from Toyota reinforces downside risks and prospects of a weaker second half of the year for the global light vehicle market.  GlobalData’s world light vehicle sales forecast for the year currently stands at 84.7 million units, an 11.9% increase on 2020 but still almost 5% down on 2019’s total.

“The pandemic is clearly far from over and appears, as far as the auto industry’s recovery path is concerned, to have a sting in the tail.”

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