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The
sustained weakness in overall performance in July from the
world's largest automaker by sales has raised concerns that
Toyota may have to lower its annual production target of 9.7
million vehicles, even as China dials back pandemic restrictions
and chip shortages are showing some signs of easing.
Toyota produced 706,547 vehicles worldwide last month, below its
target of around 800,000 units and the year-earlier output of
773,135.
Production in the first four months of the current fiscal year,
which began in April, has fallen 10.3% short of its initial
plan.
The global auto industry has weathered supply chain disruptions
caused by chip shortages and China's strict COVID restrictions,
but Toyota has also been dealing with heavy rain in Japan, a
production line halt due to a recall investigation, and
coronavirus outbreaks at a local plant.
Toyota said domestic production had tumbled 28.2%, outweighing
record July overseas production, up 4.5%, driven by a strong
recovery in Europe, China and the rest of Asia.
"In August this year, Toyota is planning to produce about
700,000 vehicles, and considering it made about 530,000 in
August last year, I think the situation is starting to improve,"
said Seiji Sugiura, senior analyst at Tokai Tokyo Research
Institute.
Eager to make a strong comeback, the company said earlier this
month it would hold to its annual production target as it
planned to raise output through November, depending on supplies
of parts and personnel. It expects September production to
rebound to around 850,000 vehicles, a record for the month.
Still, Sugiura said Toyota was not out of the woods yet, citing
uncertainty over stable chips procurement as a risk and
expressing scepticism the company could stick to the 9.7 million
production goal.
"In terms of recovery from the situation in the first half of
the year, I believe that in the second half of the year, the
company will probably set the monthly production level at
800,000 or 850,000 units a month. If production exceeds 800,000
units in a single month, that will be a record," he said.
(Reporting by Satoshi Sugiyama; Editing by Shri Navaratnam and
Bradley Perrett)
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