Toyota lowers 2022 output target to 9.5 million units

TOKYO — Toyota has told several of its suppliers it has lowered its global production target for the year to 9.5 million units, two people familiar with the matter told Reuters on Thursday.

The world’s largest automaker by sales said last week it was unlikely to meet its record 9.7 million vehicle production goal for the fiscal year ending in March 2023 due to a scarcity of chips. It did not say by how much the target would be lowered at that time.

The new target of 9.5 million global units would still exceed the previous year’s output by 10%. However, that figure could further be lowered depending on the supply of electromagnetic steel sheets, said one person who spoke on condition of anonymity because the information was not public.

Toyota has been receiving the electromagnetic steel sheets from South Korean steel giant POSCO Holdings Inc’s factory in Pohang, which suspended production after being flooded by a typhoon in September.

A Toyota spokesperson declined to comment.

The Japanese company has been under scrutiny over whether it would be able to meet its annual production target of a record 9.7 million vehicles after missing interim goals during the first four months of the fiscal year that began in April.

The announcement last week dashed optimism shared among Japanese automakers that the shortage of chips would ease, which would allow them to boost production in the second half of the year to make up for constrained output during the first.

Toyota had slashed its global production target for the previous year through March 2022 three times, reducing it from 9.3 million in May 2021 to 8.5 million in February. It ended up producing about 8.6 million vehicles that year.

Toyota is expected to report its second-quarter results and hold a news conference on Tuesday, in which executives may provide details about its global production outlook.

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