Know Everything About Toyota Production Plans For July

Toyota happens to be the world’s largest car manufacturer in the world. Regardless of efforts by other brands’ to produce cars that target the middle class, Toyota remains a top player in the global motor vehicle industry. Consumers love and buy Toyota car models because their controls are intuitive, ride quiet, and offer excellent fuel economy.

Thanks to the pandemic and other factors in the economy, Toyota’s production volume has been affected. Like many other global giants, Toyota has felt the heat of lockdowns, inadequate access to various raw materials and car components, and the economic impacts on customers. Toyota’s production plans for July are still very much affected by these factors, as highlighted below.

What Is Toyota’s Production Plan For July?

Toyota’s production volume across its assembly plants throughout the world should be approximately 800,000 units (250,000 units will be produced in Japan, and 550,000 units in other countries). This number has been revised by close to 50,000 units from the number provided to the company’s suppliers at the start of the year. The number of units provided for July seems to be the same one that will apply for August and September. Toyota still looks forward to meeting its target production for the financial year of 9.7 million units.

Toyota’s Production Plans Have Been Hampered Greatly By Covid-19

Toyota understands the impact its revision of its forecasted production volume for each month has on clients. Many customers have had to endure lengthy waits for the delivery of cars, spare parts, and other essential products. However, Toyota is quick to apologize, citing the impact of repeated lockdowns in important supplier zones leading to reduced access to essential parts. In June, the number of units affected was about 40,000, which reduced the number of units produced that month to 750,000 from 800,000.

The pandemic has made it difficult to make a more concrete prediction on production volume. Since lockdowns in strategic areas have hampered transport and attendance, Toyota has said production may be lower in the coming months. Japan first signaled a possible reduction in the production volume in May this year forced by supply chain disruption.

11 out of 28 lines are running in 7 out of 14 lines, and the company has a detailed sheet describing the periods over which the suspended lines will be out of service. Some of the affected production plans include:

• Motomachi: here, ten days will be cut leading to lower units of the Lexus LC, Mirai, Toyota Gr Yaris, and the BZ4X
• Takaoka: here, the RAV4 is produced, and ten days will be cut from production

Other Toyota cars that will be affected include other Lexus models, the Yaris hatch, and the LandCruiser. However, they are doing everything possible to deliver vehicles to their customers at the earliest possible date. Toyota has also said in a statement that they will closely monitor the parts supply chain to avoid drastic reductions in production units.

What Vital Components Are In Short Supply?

Toyota is not the only automotive company affected by Covid-19-related lockdowns. Outbreaks in China have disrupted supply chains that provide semiconductors and other electronic components to other motor vehicle manufacturers, in addition to Toyota. These firms also have to compete for the limited supply with other manufacturers such as home appliances and electronic device companies.

Other Effects Of Covid-19 On The Automotive Industry

Toyota’s production forecast for July and the trend for the months of May and June are an indicator of how severe Covid-19 has affected the automotive industry. Among the biggest impacts remains the disruption of exports of Chinese spare parts and electrical components. In the US, some vehicle assembly plants are shutting down altogether, while others are unable to deliver on their contracts, requiring banks to step in. some of the reasons why plants such as Toyota are seeing a reduction in production volume include:

• A transfer of capital to sustain plant operations has starved the research and development departments. Without resources, these companies are unable to come up with unique technological solutions to meet customers’ needs.
• A global reduction in demand for motor vehicles due to the economic recession brought about by the pandemic. A reduction in demand means a reduction in sales, which reduces revenue and profits for the companies.
• Liquidity issues due to a deteriorating market, which causes the firms to suspend multiple production lines as they struggle to distribute whatever little revenue they have. This disruption in production has had catastrophic effects on some companies, forcing them to shut down completely.

Toyota’s Response To The Effects Of The Pandemic

Toyota insists that the security and safety of its staff, customers, and other stakeholders is their top priority. In this regard, the company took several measures as advised by the government to prevent the spread of infections while keeping its doors open to customers. Their showrooms reduced the number of open hours across its Japan and overseas showrooms and suspended other exhibitions and tours.

Toyota’s production policy also involves keeping a greater inventory of key vehicle components such as semi-conductors compared to its competitors. This policy has reduced the level of production disruption amid the global shortages and enabled the company to retain its market share in companies such as the United States and China. Despite several returns to lockdown in strategic areas of operation, Toyota has managed to recover, with its results for the financial year ended March 2021 showing a global sales rise of 19.1%.

Conclusion

While Toyota has reduced its production volume for July, its superior supply chain management should ensure that as many customers get their cars as soon as possible. Despite the risks posed by the semiconductor shortage, Toyota still looks forward to producing 9.7 million units, meaning that every customer should have their car by the end of the financial year.