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By Shubhangi Mathur, 3:28 PM ET
Toyota Motor Corp decided to cut its annual production target by 300,000 vehicles due to slowed output in Vietnam and Malaysia factories as COVID-19 cases surge.
The rise in coronavirus cases have added to the global chip shortage issue faced by the automakers. Instead of 9.3 million vehicles, the Japanese automaker now expects to build 9 million vehicles in the year ending March 31.
Toyota said on Friday it will cut its output by 70,000 this month and by 330,000 in October. A total of 360,000 vehicle output cut in worldwide production had been announced in September.
The company, though, kept its operating profit forecast unchanged for the year at 2.5 trillion yen ($22.7 billion).
Until now, Toyota had managed to avoid output cuts but its announcement on Friday shows that all the companies are affected by the pandemic and chip shortage.
In China, car sales went down by almost a fifth from a year earlier as there were not enough vehicles to meet the demand.
The chip demand has surged during pandemic primarily due to increased demand of smartphones, tablets and other devices.
Other automakers including Volkswagen AG has warned it may have to further cut production due to chip shortage.
Ford Motor Co also stopped production at a plant in Kansas last month which builds its best-selling F-150 pick up.
(With inputs from Reuters)