Chip Shortage Slows Down Global Vehicle Production for Toyota

Due to a global shortage of semiconductor chips, Toyota announced temporary vehicle production restrictions in Japan and North America on Thursday. The move is expected to significantly restrict the supply of new Toyota automobiles and trucks, which are already scarce in some areas.

When asked about what exact vehicles would face the consequences, Toyota confirmed that almost all of its automobiles would suffer the worst effect on the Camry and RAV-4. The production halt affects all of the company’s North American sites, including those in Indiana and Kentucky, and is scheduled to last until the end of September or early October.

A shortage of new automobiles caused by the chip shortfall has reverberated across the automotive sector, stoking used car prices to new highs and increasing the value of presently leased vehicles. In certain cases, used automobiles are increasing in value, shocking analysts who have long considered that automobiles are a depreciating asset.

Toyota aims to cut production by 60,000 to 90,000 vehicles in August and 80,000 in September, according to the company.Toyota has 14 facilities in North America, including ten in the United States, employing over 176,000 people. The automaker’s American factories produced around 1 million of the 2.1 million vehicles it sold in the United States in 2020.According to Cox Automotive, the Toyota brand had only a 20-day supply of new automobiles on hand at the end of July, while the company’s premium Lexus brand had a 23-day supply.