(Bloomberg) -- Toyota Motor Corp. slumped as much as 4.7% as the worsening chip shortage saw the world's No. 1 automaker suspend output for several days at almost all its plants in Japan next month, forcing a 40% cut in production plans.
Adjustments will be made to the production operations of plants for completed vehicles in Japan due to parts shortages resulting from the spread of Covid in Southeast Asia, Toyota said in a statement Thursday. A total of 360,000 fewer cars will now be made next month. The cuts were reported earlier by Nikkei.
Some 27 lines in 14 plants in Japan will be impacted, affecting production of models from the RAV4 to Corolla, Prius, Camry and Lexus RX, Toyota said. That represents a hit to every one of the plants Toyota has across the country bar one.
“Especially in Southeast Asia, the spread of Covid and lockdowns are impacting our local suppliers,” Toyota's Purchasing Group Chief Officer Kazunari Kumakura said. Going forward, the company will look at ways of further diversifying its supply chains to not focus on one region and is attempting to find replacement parts from suppliers in other regions, he said.
Kumakura declined to comment on specifics regarding Toyota's parts shortages, but noted supply chains in Vietnam and Malaysia were particularly impacted.
Toyota maintained its annual operating profit outlook earlier this month, disappointing investors that had been buoyed by its peer-beating financial performance on the back of brisk global demand for automobiles. The carmaker kept its forecast for 2.5 trillion yen ($22.7 billion) for the fiscal year through March, versus analysts' average projection for 2.95 trillion yen.
While a shortage of automotive chips has hindered many rivals' ability to capitalize on strong global demand for cars over the past nine months, Toyota up until now had been relatively unimpaired due to its supply-chain savvy and the strong stock it keeps of key components such as semiconductors.
An alarming Covid outbreak in Southeast Asia has however weighed on the company. Toyota also has a large manufacturing presence in Thailand, where case numbers have been hitting records.
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Last month, Toyota said it was extending production halts in Thailand due to Covid-related parts shortages. The carmaker's plants in the country have combined production capacity of 760,000 units per year.
Shares of Toyota's suppliers and affiliates also tumbled, with Toyota Industries Corp. sinking 4.1% and Aisin Corp. down 5.8%. Toyota Industries generates 12% of its revenue from Toyota, according to Bloomberg data, while Aisin gets 57% of its sales from the automaker.
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