The shortage of the semiconductor microchip continues to pound the global automotive industry, forcing the majority of automakers to take prudent steps to ensure their survival in the current times of strife.
A recent news report by BBC claims that Toyota has decided to reduce its global vehicle production by 40 percent due to the shortage of the semiconductor microchip. It added that the Japanese automotive giant had initially planned to manufacture 900,000 units next month but has now decided to reduce the target to 540,000 units.
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There has also been a decrease in the production figures of other giants such as Honda, Nissan, Volkswagen Audi Group, Daimler, BMW, the Stellantis Group, the Hyundai Motor Group, General Motors, the Ford Motor Company, Jaguar Land Rover Automotive, SAIC Motor, and Geely, to name a few.
The manufacturing plants based in the Czech Republic, France, Japan, the US, and in Asia countries have reportedly been hit hard by the recurring and devastating waves of the pandemic. The resurgence of COVID-19 has also been cited as the culprit for an overall inconsistency in trade and business activities in these regions.
According to the report, Toyota is currently enjoying relatively stable production numbers by virtue of having accumulated a huge stockpile of semiconductors in the interest of keeping its sales stable after the Fukushima earthquake and tsunami that occurred 10 years ago.
With a significant rise in the demand for vehicles worldwide, it is being speculated that the effects of the global shortage of the chip are likely to increase.
Impact on the Pakistani Market
The effects of the shortage of the semiconductor chip are being felt all over the world and Pakistan is no exception. Delayed deliveries are being reported by several automakers, including the Toyota Indus Motor Company (IMC), that is attributed majorly to the shortage.
The Toyota IMC had boasted a large bump in sales in July, which (as speculated by the industry analysts) is mostly due to the reduction in the prices of vehicles after the enactment of the new auto policy and the sudden bump in the production numbers last month.
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However, companies had been struggling to maintain their production numbers alongside the demand for the vehicles during the three months preceding July.
This has also led to speculations that the automakers may elevate the prices of their vehicles soon due to depreciation of the local currency against the US Dollar and various supply chain hurdles such as the shortage of port staff, containers, raw materials, manufacturing components, and increased freight charges.
