Supply chain issues force Toyota to halt production at 5 factories

Toyota Motor Corporation is to suspend production at five domestic factories in January as a result of supply chain issues, chip shortages and the COVID-19 pandemic.

Japan’s leading car manufacturer said that the stoppage at the factories will affect about 20,000 vehicles, but won’t impact its annual target to manufacture nine million vehicles.

Last week, Toyota said it was projecting a bigger reduction in vehicle production in North America in January to 50,000 units as a result of supply chain issues.

For the past year, the pandemic-induced shortage of semiconductor chips has rocked global supply chains, affecting the production of cars, game consoles, home appliances and more, with experts suggesting it could take another year or more for the shortages to ease along the supply chain.

Chip industry leaders are divided on when the supply chain constraints could end. AMD CEO Lisa Su said in September said she expects the shortage to ease in the second half of 2022.

Meanwhile, the CEOs of Intel, Nvidia and TSMC expect the chip shortage to continue until 2023. IBM CEO Arvind Krishna has offered the most pessimistic forecast, saying the shortages could last well into 2024.

Meanwhile, in a new Confederation of Indian Industry (CII) poll, 34% of the CEOs surveyed said the spread of the new variant may also affect manufacturing activities.

The new variant of covid-19 in India is also spreading fast, with 30 new infections detected on Saturday, taking the total tally to 145.

The Toyota announcement will be a further blow to those who were hoping that 2022 could get off to a brighter economic start than this year, in which Supply chains around the world have been hit by massive disruptions, from container shortages to floods and COVID infections setting off port closures.

Some of the world’s busiest ports are in China. Of the top 10 busiest ports, seven are in China, according to data from the World Shipping Council. Shanghai ranks first, Ningbo-Zhoushan ranks third, and Shenzhen in fourth place, while Hong Kong is the eighth most busy port last year.

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