Home Business Toyota Cuts Production in Shanghai Due to Covid Lockdown

Toyota Cuts Production in Shanghai Due to Covid Lockdown

Toyota Cuts Production in Shanghai Due to Covid Lockdown
Source: New York Times

Due to the coronavirus shutdown in Shanghai, Toyota said it will shut down additional production lines at its Japanese facilities this month.

The production halt will begin on Monday and last through the end of next week, according to the company.

It’s the latest major automaker to say that China’s Covid-19 regulations are affecting them.

Meanwhile, most production at Tesla’s Shanghai facility has apparently been suspended owing to component shortages.

“We announced our altered production schedule for May due to the effect of the semiconductor scarcity,” Toyota stated in a statement.

“However, due to the lockdown in Shanghai, China, we have decided to cease operations of 14 lines at eight plants in Japan from May 16 (Mon) to May 21 (Sat),” it said.

Due to the shutdown, the business originally stated that it anticipated to produce roughly 750,000 vehicles globally this month, but that number has now been reduced by about 50,000.

Toyota also announced on Wednesday that its quarterly earnings had fallen by a third as a result of production bottlenecks caused by a worldwide lack of computer chips and China’s Covid-19 limitations.

The world’s largest automaker by sales reported an operational profit of 463.8 billion yen ($3.56 billion; £2.9 billion) for the three months ended March 31, much below market estimates.

In Wednesday afternoon session on the Tokyo Stock Exchange, the company’s shares were down around 4.5 percent.

Toyota’s comments came as Shanghai enters its sixth week of a tightening lockdown that has made it more difficult for factories to function due to rigorous limitations on people and material mobility.

It’s the latest example of a major automaker being compelled to reduce output because to the Shanghai lockout.

According to Reuters, which cited an internal document, Tesla has paused most of its manufacturing at its facility in the city owing to difficulty obtaining parts for its electric vehicles.

According to the news agency, the business intended to produce less than 200 automobiles at its manufacturing in the city on Tuesday.

That would be significantly less than the 1,200 vehicles per day that Tesla’s Shanghai plant produced immediately after returning last month after a 22-day shutdown.

Meanwhile, according to figures supplied by the China Passenger Car Association, Tesla’s sales in China fell by 98 percent in April compared to the previous month.

Tesla CEO Elon Musk, though, claimed China’s lockdown restrictions would not be “a huge issue in the next weeks” during a virtual appearance at the FT Future of the Car 2022 conference on Tuesday.