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Biggest carmaker Toyota now feels effects of semiconductor shortage

The world’s biggest carmaker is only now beginning to feel the effects of the semiconductor shortage, which has been affecting multiple industries and other car manufacturers for months.

Toyota is now feeling the effects of the semiconductor shortage as they’re set to cut vehicle production by almost 40 per cent next month. It is expected that a slowdown will be felt in all major markets including Australia, where the company has been the top-selling car brand for the past 18 consecutive years.

Anyone wishing to purchase a new Toyota will have to wait longer than the current extended delivery times caused by an increase in demand and shortage of new cars.

The Japanese car brand had been mostly immune to the interruptions to production, until now, as executives said earlier this year that the company has learnt about vulnerable parts shortages from prior disasters such as floods, earthquakes, and nuclear fallouts.


After announcing it had learnt to keep a large reserve of semiconductors, which is one of the weakest links in the automotive supply chain as they can take several months to manufacture and cannot be accelerated, Toyota is now experiencing the same delays that have affected the automotive sector.

Modern cars use anywhere from 300 to 3000 semiconductors, which are used to run infotainment systems, safety tech, and other onboard electronics.

Overseas media reported that Toyota will reduce global car production by 40 per cent in September due to a shortage in semiconductors amid the outbreak of the Delta variant in south-east Asia, which has decelerated component production due to worker illnesses.

Factories in Japan that manufacture models like the RAV4, Corolla and Camry are affected. The Tahara factory in Japan that produces the new LandCruiser 300 Series four-wheel-drive and Prado 4WD will be impacted by the production slowdown.

Toyota planned to build 900,000 vehicles globally in September, which is about 10 per cent of its annual target but instead will lose about 360,000 production slots.

“We have factored in risk factors in our annual plan, but as for September the impact came sooner and deeper than expected,” Toyota’s chief communications officer Jun Nagata said as quoted by Automotive News.

In June this year, Toyota Australia executives said that the company would elect to slow down production rather than remove technology from cars, which saw brands like BMW, Mercedes-Benz, and Peugeot do on certain models to keep their production lines moving.

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