Toyota Motor, Japan’s largest automaker, continues to struggle with supply chain disruptions regarding components but still hopes that production at its plants in Japan and overseas will average 850,000 units/month during August-October.
This was the target it had announced in June for August global production, but Mysteel Global has learned the carmaker is now informing its components suppliers it intends to produce 20% fewer cars at its domestic plants next month, which will pare global output to just 700,000 vehicles – 200,000 at its domestic plants and 500,000 units at those abroad.
Industry watchers say Toyota has also told its component suppliers that it plans to produce over 300,000 units domestically in September and October, but some warn that achieving this could be a challenge.
“To archive the target, production in September-October will have to be much higher, but the company has been adjusting its production plan lower every month for nearly a year,” a sales official from a coil center in central Japan said. “Before we start lifting our operations, we’ll have to wait and see if Toyota can really lift its output from September – otherwise our flat steel stocks will mount further.”
Domestically next month, Toyota plans to produce 200,000 units with 18 days of operations, equivalent to about 11,000 units/day of production. The company hosts 28 assembly lines in 14 plans across Japan, and its components headaches have forced it to decide to idle nine lines at six plants for up to 18 days next month, Mysteel Global has learned.
To produce over 300,000 units/month in September and October, output will have to average 13,000 units/day or 14,000 units/d respectively. Toyota is maintaining its global output plan for the current fiscal year (April 2022-March 2023) at 9.7 million units.
But the coil centre sales official warned that actual production may fall below target because the seventh COVID-19 wave sweeping across Japan is forcing many workers to isolate at home, and vehicle assembly may be disrupted by a shortage of workers. “We estimate that actual output in August may fall below 10,000 units/day,” he said. On Saturday, Japan’s daily COVID-19 cases topped 200,975, breaking through the 200,000 level for the first time since the pandemic started, Mysteel Global notes.
A Tokyo-based flat steel trader observed that if Toyota can realise its plan for September, this will help Japan’s flat stocks to start declining. “After that, the integrated mills and special steel producers will finally be able to lift their output, but the increment will be small because the existing stocks are high,” he noted.
Japan produced approximately 4.53 million tonnes of hot-rolled coils, cold-rolled coils and galvanized sheets in June, down 18.2% on year and 14.1% lower on month, Mysteel Global calculated based on the latest data from the Japan Iron & Steel Federation.
Written by Yoko Manabe, yoko.manabe@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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