Toyota (NYSE: TM) cut its July production projection from 850,000 cars to 800,000 vehicles on Wednesday. Covid-19 lockdowns were cited as the cause of the parts shortages. It starts, “We at Toyota would like to again apologize for the numerous modifications to our production schedules,” the company’s press statement reads.
Toyota’s manufacturing schedule is periodically revised. For June, July, and August, the goal had been set at 850,000 units each month back in May. Toyota pulled out 50,000 automobiles for June at the end of May. For July, they’ve done the same.
June output is projected to fall short of the goal of 800,000 units. In the last several days, Toyota has suggested that 750,000 units are more probable.
Toyota’s stock rose by approximately 0.8% on Wednesday in trading outside the United States.
For investors as well as automobile purchasers, supply-chain difficulties aren’t a surprise. For a while longer than projected, fewer output equals lesser stockpiles and higher pricing. New automobile prices have risen by nearly 15% since the beginning of 2021 in the United States, according to Federal Reserve statistics.
It’s Toyota’s goal to recoup part of the manufacturing that was lost. For the fiscal year 2023, which runs from April 1 to March 31 of the following year, they still want to produce 9.7 million automobiles.
Toyota’s stock price had fallen by a healthy 14 percent as of the close of trade on Wednesday, outperforming other automakers’ stock prices. The stock prices of General Motors (GM) and Ford Motor (F) have fallen by 44% and 45%, respectively.
The S & P 500SPX +2.45 percent and the DJIA +2.15 percent have fallen around 21 percent and 16 percent, respectively.
Inflation has taken a toll on the car industry, which has seen its stock prices fall the most. Demand for automobiles is threatened by rising interest rates, which are being used to combat inflation. And all of this is happening at a time when there are still problems with the supply chain.