Toyota is now faced with the challenge of securing substitute parts and recovering lost output in time to meet an inventory-depleting level of global demand for cars.
supply chains have sparked deeper questions about whether the auto industry’s strategies to prioritize efficiency and maintain minimal inventory will endure in the post-pandemic world.
Carmakers globally have lost revenue because shortages have slammed output. India’s largest automaker by deliveries, Maruti Suzuki India Ltd., said volume would probably drop to about 40% of normal this month and Tata Motors Ltd. on Wednesday blamed “the recent lockdowns in East Asia” for worsening the supply situation. China’s Nio Inc. has struggled with partners in
. Also in Japan, Suzuki Motor Corp. will cut vehicle production by 20% in September; in Europe, Renault plans to halt assembly plants in Spain for as long as 61 days before the end of the year.The automobile sector is accustomed to much thinner profit margins than those enjoyed by big technology companies, even after decades of trying to drive down costs, said Howard Yu, a professor of management at the Switzerland-based.
That concentrated approach worked, until it didn’t. Midway through this year, Southeast Asia began to grapple with one of theCOVID-19 resurgences. Governments declared lockdowns and restricted business activities, at times halting entire plant operations upon the discovery of just a handful of confirmed cases.
Vietnam is Japan’s biggest source of wire harnesses. Several Japanese parts makers operate plants in the country. The Hai Duong factory that shut in early August belongs to Sumitomo Electric Industries Ltd., which declined to comment on individual site operations. Another major wire-harness maker and Toyota supplier in the region, Furukawa Electric Co., has been forced to limit operations due to COVID restrictions, according to a company spokesperson.
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