Japanese car production falls for the 3rd consecutive year

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Shortages of auto parts and semiconductors amid the novel coronavirus pandemic are responsible for lower domestic auto production in fiscal 2021 for the third straight year.

Japan’s eight major automakers announced on April 27 a 6.8% decline from a year earlier to 7.094 million units.

Domestic production fell among all companies except Mitsubishi Motors Corp.

Nissan Motor Co. posted the biggest decline at 13.8% among them, followed by a 13.3% decline for Subaru Corp.

Toyota Motor Corp. experienced a 5.4% drop in domestic production to 2.761 million units.

Toyota estimates that a level of 3 million units of domestic production is needed to preserve its employment base and worker skills.

However, it scored a production figure below that level for the second year in a row. The 2.761 million units were the lowest since the 2.58 million recorded in fiscal year 1976.

National output of the eight companies in March fell 18.2 percent year on year to 676,000 units.

Global production in fiscal year 2021 decreased by 0.6% from the prior fiscal year to 23.217 million units, a decrease of 13% from fiscal year 2019, when the influences of the pandemic were limited.

Toyota recorded a 4.7% increase in global production to 8.57 million units. But the figure fell short of the 8.74 million units recorded in fiscal 2019.

The decline in production affected sales of domestic manufacturers. Global sales fell 0.5% to 24.309 million units while domestic sales fell 9.8% to 3.816 million units.

The blame lies with the chain of auto parts makers that halted operations due to the spread of novel coronavirus infections.

Automakers have also been hit by prolonged shortages of semiconductors.

In April, the supply of auto parts was delayed due to a strict lockdown in Shanghai China due to a spike in COVID-19 cases, affecting auto production.

Honda Motor Co. expects production at its Suzuka plant in Mie prefecture in early May to be cut in half from the original plan. Subaru and Mitsubishi also plan to suspend operations at their factories.

The slowdown in production also affects customers.

Many national car dealerships are taking significantly longer to deliver their cars to buyers due to a shortage of new automobiles. For some models, delivery takes longer than six months.

(This article was written by Junichi Kamiyama and Kohei Kondo.)

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