Toyota Motors is reducing the production of the Lexus luxury car due to the chip shortage

Toyota Motors is reducing the production of the Lexus luxury car due to the chip shortage

Due to the shortage of chips, the Japanese company Toyota Motors is forced to limit the import of its luxury cars in Japan.

Why is this important?

Toyota Motors is the largest car manufacturer in the world, but it needs more chips to produce enough. It is also Japan’s largest trading company by taxpayers. Japan’s economy, the world’s third largest, has been sluggish for several years and could miss an underperforming Toyota Motors car like a toothache.

In news: The shortage of semiconductors is likely to continue until 2023, causing Toyota’s luxury brand Lexus to take a hit.

  • According to Nikki Asia The company will establish a system to share information about delivery dates with each car dealer. This should ensure a steady flow of orders that Toyota Motors can fulfill. Auto dealers and Toyota Motors can brace themselves when production is brought back up to par.
  • Currently, there is already an exceptionally long waiting time for Lexus in Japan. These can vary for some models from one year for the Lexus NX to even 4 years for the Lexus LX.
  • Production of other Toyota vehicles is less affected by the chip shortage, so supply is not affected. The company aims to sell 10.6 million vehicles in 2023.

Still no shortage of chips?

zoom in: The shortage of semiconductors started during the corona crisis when consumers who stayed at home bought more electronic devices like smartphones. As a result, the industry took a big bite out of the global supply of semiconductors, which meant that car manufacturers suddenly had less access to them.

  • Last autumn, the demand for electronic equipment decreased, so that more chips were available on the market again. However, problems with supply chains are difficult to solve.
  • This is because car manufacturers still use the semiconductor analog variant, although this no longer includes many semiconductors. Chipmakers expect increased demand from more sophisticated semiconductors, such as electric vehicles. These chip makers are also trying to expand, but cannot keep up with global demand.