Here's Why Toyota Cuts Production By 20%

Here’s Why Toyota Cuts Production By 20%

To reduce the pressure to deal with the shortage of microchips and other components, Toyota said it would reduce domestic production by 20 percent for its previous plan from April to June.

A spokesman for the Japanese carmaker explained that the shortage had forced its dealers to make a number of changes to production times, so the reduction in Toyota’s production could give them some comfort. Sozcu also plans to reduce local production by 20 percent in April, 10 percent in May and 5 percent in June.

Toyota president Akio Toyoda met with union workers on Wednesday and said dealers could “run out” without a “solid” production strategy. He added that April, May and June will be a period of “deliberate cooling” to focus on safety and quality.


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The spokesperson also mentioned that the move demonstrates Toyoda’s intent to share information with suppliers early so they can schedule their operations accordingly. However, the production from April onwards will remain high despite the reduction as an original plan has already compensated for previous production losses.

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