The ongoing semiconductor shortage is forcing Toyota to cut back the company’s worldwide car production by 40% in September.
The Japanese automaker is also scaling back production, citing COVID-19’s impact on parts suppliers in Southeast Asia.
“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,” the company told The New York Times.
In North America, Toyota is slashing production by 60,000 vehicles down to a total of 90,000, according to the Associated Press. In Japan, the automaker also plans on reducing car production at 14 factories, which will bring down vehicle production by about 140,000.
The total cuts mean Toyota’s global production for September will fall by 360,000 vehicles.
The chip shortage has been ensnaring automakers since last winter amid soaring demand for microprocessors across the industry. Initially, the pandemic caused car makers to scale back chip production under the assumption vehicle sales would fall. However, bigger-than-expected demand has since caused automakers to scramble for more supplies when semiconductor capacity is already strained.
In Toyota’s case, the company had managed to largely avoid the supply crunch. The Times notes the automaker had been holding a large stockpile of chips and other components after suffering previous shortages following the 2011 earthquake that devastated parts of Japan.
At the same time, major chip manufacturer TSMC said it expects supply problems to ease for automakers in the coming months, following a ramp-up in production. However, Toyota's announcement indicates the auto industry is still struggling to stay ahead of shortages.