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Toyota Cuts FY Production View; Backs Operating Income Outlook

Toyota Motor Corp. (TYT.L,TM) on Friday announced changes to production plans for the month of September and October, and also trimmed view for fiscal year ending March 31, 2022, citing the shortage of certain parts caused by the spread of COVID-19 in Southeast Asia.

Further, the company maintained full-year operating income view of 2.5 trillion Japanese yen.

In pre-market activity on NYSE, Toyota shares were gaining around 1.1 percent to trade at $182.

The global production volume affected by the adjustments will be approximately 70,000 units for September, comprising 40,000 units overseas and 30,000 units in Japan. The volume affected by adjustments in October will be 330,000 units, including 180,000 units overseas and 150,000 units in Japan.

Due to the impact of the production cut, the company now projects full-year volume of 9 million units, down from the 9.3 million units expected earlier.

Toyota noted that the outlook for November and beyond is unclear, but current demand remains very strong. As a result, the production plan for November and beyond assumes that the previous plan will be maintained.

The reasons for the production adjustment include a decline in operations at several local suppliers due to the prolonged spread of COVID-19 in Southeast Asia and the impact of tighter semiconductor supplies.

Toyota said it is continuously assessing the situation as the demand for semiconductors in all industries continues to increase, and is discussing medium- to long-term countermeasures with related companies.

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