Toyota curtails vehicle production by 40% as chip shortage slams automaker

Toyota will stop production at every single North American plant save for one in August.

Sean Szymkowski
It all started with Gran Turismo. From those early PlayStation days, Sean was drawn to anything with four wheels. Prior to joining the Roadshow team, he was a freelance contributor for Motor Authority, The Car Connection and Green Car Reports. As for what's in the garage, Sean owns a 2016 Chevrolet SS, and yes, it has Holden badges.
Sean Szymkowski
2 min read
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Not great news.


Toyota fared a bit better as the semiconductor chip shortage ravaged rivals this year, but it faces serious effects for the first time. The automaker said Thursday it will slash production by 40% globally through September. In other words, it will build 40% fewer cars (360,000 fewer, the company estimates) than it thought it would this year, which could have even worse affects on new car shoppers.

In North America, all but one plant will suspend production: the automaker's plant in San Antonio, Texas, which builds the Tacoma and Tundra pickup trucks. RAV4, Camry and more vehicle production will be offline for a period of time.

The automaker said in a statement, "Due to COVID-19 and unexpected events with our supply chain, Toyota is experiencing additional shortages that will affect production at most of our North American plants. While the situation remains fluid and complex, our manufacturing and supply chain teams have worked diligently to develop countermeasures to minimize the impact on production."

Toyota added it expects to lose between 60,000 and 90,000 vehicles to the production cuts in August and 80,000 in September, specifically in North America. "The situation remains very fluid. We do not anticipate any impact to employment at this time," the statement added.

According to Automotive News' Research & Data Center, Toyota began August with just a 16-day supply of new cars for sale, and luxury cousin Lexus only a 23-day supply. While automakers have consistently raked in more profits due to the tight inventories, too few cars could start to have serious financial repercussions for automakers as buyers look elsewhere or turn to the used market to find a set of wheels.

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