You can now follow the latest news for free through our Facebook page
Click here to subscribe
Japanese automaker Toyota’s profit fell by about 21 percent in the final three months of last year, due to a global decline in chip production.
The company announced that its profit during the third quarter of the current fiscal year amounted to about دولار 5 billion.
Why Toyota is having to cut its car production by about 40 percent
Intel’s new boss: too many chips made in Asia
The company, the world’s biggest car seller, has cut its annual production by about half a million cars, bringing the current year’s output to only about 8.5 million.
This comes at a time when producers of gadgets and electrical goods are suffering from a decline in the supply of electronic chips, which are essential for all these goods.
Toyota said in a statement: “We sincerely apologize for the problems we have caused to all customers, due to a series of production declines since last summer, and we are working hard to return to full production capacity as soon as possible.
The company cut production by about 40 percent in September, for the same reason.
It also announced the suspension of production operations several times over the past months, due to the shortage of some important parts for manufacturing, as a result of unfavorable conditions during the period of the coronavirus pandemic, which severely affected supply chains.
Tu Lee, chief executive of Auto Insights, told the BBC:” the chip shortage crisis will be a crisis for Toyota during 2022 as well, but it is likely to deal with it better than other competitors.
“They often see a good opportunity at the heart of the crisis, because they can manage the crisis better than General Motors and Volkswagen. “So I expect Toyota to have a better year than the rest of the competitors.
Toyota strengthened its position last month as the world’s top-selling carmaker by widening the gap between itself and its closest rival Volkswagen.
Toyota warned customers in Japan last month that they would have to wait up to 4 years to receive their Land Cruiser-class cars.
The company stressed that the delay was not related to the chip crisis or the supply chain crisis.
The Land Cruiser is the longest-lived vehicle in the company’s history, since its launch in 1951, with 10.6 million vehicles sold through the fourth quarter of 2021.
Mariko Oi analysis
Affairs correspondent Business In Asia
The period of the coronavirus epidemic has seen a significant rise in demand for electrical goods, medical devices, in which electronic chips are used.
This means that there is no longer enough Semiconductor for many car manufacturers.
When the crisis hit car companies early last year, Toyota was more prepared for the crisis than its competitors.
The company faced the same crisis after the East Asian tsunami nearly a decade earlier.
Some chip factories in the region were destroyed at the time, disrupting production chains for Toyota and other automakers.
The company then revised its policy, and began stockpiling large quantities of chips, so that it had enough for four months of production.
But as the coronavirus pandemic continues, these stocks of chips have declined, the company is expected to miss its expected production target, and experts predict that the chip crisis will continue until the beginning of next year at the very least.
Despite this, the arena is witnessing significant investments to establish factories for the production of chips for the automotive industry, something that no one considered before the coronavirus pandemic.
Chip manufacturers are seeking to acquire new customers among automotive design companies after the current crisis, which expanded the market for their customers, as well as the expansion of the manufacture of electric cars, which require more sophisticated chips, than the chips used in cars that run on internal combustion engines.
For the electric car market, Toyota has more experience than the rest of the companies because it has invested more time in hybrid technology.
So in addition to overcoming the chip shortage crisis, Toyota wants to catch up with its competitors in the electric car market, if it wants to continue its position as the world’s top-selling car company.