Toyota Motor, Japan’s largest automaker, has informed its component suppliers that the company will lower its vehicle output for May and June by about 8-16% across all domestic plants, due to the continuing delay in component deliveries. And market sources shared that Japan’s flat steel consumption by the domestic auto sector won’t become active in the current quarter.
The company had initially planned to rump up output since last October to cover the loses from last summer also caused by the delay in component supplies from Southeast Asian countries, but the company has been delaying its production schedule, as reported.
With the latest output adjustment, Toyota plans to produce about 200,000 units in 17 days of May, averaging 12,000 units/day, or about 8% lower than its plan a month ago, and around 260,000 units in 22 days of June, down 16% from the initial plan, sources shared.
A Tokyo-based flat steel trader observed that Toyota’s further downward adjustment must have to do with the COVID-induced lockdown in Shanghai, because Shanghai is the key dispatch base to deliver components to Japanese automakers.
“Other Japanese automakers, such as Honda, Mitsubishi and Mazda had already been forced to halt their operations in April for couple of days due to logistics disruptions amid the lockdown in Shanghai. So further impacts may be seen, and Japan’s auto output cut may be deepened,” he warned.
On the other hand, Shanghai’s lockdown is also forcing Japanese automakers to adjust their output lower with stagnated auto exports to China, the trader added.
However, Toyota seemed to plan for production ramp-up from July, targeting 300,000 units with 21 days of operation. “It will be above the high production level of 14,000 units/day and it will help tighten Japanese supply of steel flats. But we really wonder if Toyota’s output could be that high in July and it may be adjusted lower again,” a coil center sales official in central Japan said.
Written by Yoko Manabe, yoko.manabe@mysteel.com
This article has been published under an exchange agreement between MySteel Global and SteelMint.
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