The cutbacks at Toyota’s plants are the latest sign that the chip shortage will hang over the industry well into the second half of the year.
“Due to COVID-19 and unexpected events with our supply chain, Toyota is experiencing additional shortages that will affect production at most of our North American plants,” Toyota Motor North America said in a statement shared with Automotive News. “While the situation remains fluid and complex, our manufacturing and supply chain teams have worked diligently to develop countermeasures to minimize the impact on production. … We do not anticipate any impact to employment at this time.”
Toyota and Lexus dealers, who have been getting by for months working with some of the leanest inventories in an industry at historically low inventory levels, are about to see even that trickle of vehicles dry up.
In an email to dealers Tuesday from Southeast Toyota Distributors, the automaker’s largest U.S. distributor, that was shared with Automotive News, it counseled dealers to accurately report their sales so that they would get their appropriate allocation of available vehicles, a spokeswoman for the distributor confirmed. Southeast Toyota distributes Toyota vehicles to 177 dealerships across Florida, Georgia, Alabama and the Carolinas.
“Due to the uncertainty of future production dates, TMNA has provided guidance to exclude North American production weeks from tonight’s [mid-month] allocation,” the note said. “We will continue to assess the stability of future build weeks and will postpone allocating unbuilt production until we have a higher level of confidence in the supply chain.”
The note goes on to detail a revised allocation pool consisting of just 1,830 vehicles “solely comprised of confirmed [completely built units] production already in transit to our Vehicle Processing Centers.”
Toyota Motor North America began August with 139,600 vehicles in dealer inventory or on the way to dealers, with 26,900 of those being Lexus vehicles and the remainder wearing a Toyota badge, according to the Automotive News Research & Data Center. That gave Lexus a 23-day supply and Toyota a 16-day supply of new vehicles to sell.
Toyota Motor North America sold 225,022 new vehicles in the U.S. in July, and 191,842 in August 2020. In the second quarter, it narrowly outsold General Motors on the domestic automaker’s home turf — 688,812 to 683,696.