#ProductionShortfall

Despite being one of the only manufacturers not to incur heavy production losses over the global semiconductor shortage, Toyota has announced that its luck has finally run out. The automaker is estimating that it will need to cut assembly by 40 percent this September.

It’s not alone. Both Ford and General Motors have announced they’re also stifling production this week to account for a deficit of chips. Even Volkswagen Group has been cautioning that it might schedule more downtime going into the fall. But that’s basically been the story for all of 2021. Toyota just happens to be the newest inductee.

While the global semiconductor shortage is often reported as this out-of-nowhere surprise that has totally rattled smartphone and automotive manufacturers, 2020 was rich with signals that trouble was afoot. Global lockdowns forced factories to shut down, creating a lapse in demand in damn-near everything. By the time lines started firing back up, supply chains had become a disorganized mess. Nobody knew quite where to focus their efforts. But it was clear that everyone was going to be spending a lot more time indoors, resulting in an elevated need for the sort of components that go into mobile devices, television sets, personal computers, and other electronic gizmos.

Automobiles saw demand suppressed by around 15 percent (year-over-year) in 2020. However, the year ended with increased demand the industry figured would carry over into 2021. That, in conjunction with vehicles needing more semiconductor chips than ever to make sure they’re equipped with the latest features and perpetually connected to the internet, has automakers sweating. Practically every name in the industry has announced production shortfalls. But just exactly how many vehicles are we expected to lose from this?