Two years ago, it was unimaginable that a global car company would cut production. Worldwide demand for cars and light trucks was brisk almost everywhere. That demand remains brisk, but there are not enough cars.
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The microchip shortage that has battered the industry prompted Toyota to say it will cut global manufacturing by 100,0000 down to 850,000. That will affect company earnings and the financial health of dealers, and it may push consumers to put off new car purchases for months, if not years.
Depending on the year, Toyota is the world’s largest manufacturer, as it trades places off and on with Volkswagen. Due to this distinction, it can be claimed that its fortunes are as good a measure as any other for the short-term future of the industry.
The news means the two U.S. car companies, Ford and GM, could miss their numbers as well. The stocks of both companies have cratered due to low sales volume and suspicions that they cannot emerge as leaders in the electric vehicle part of the industry. That means current and future sales will be compromised.
Many experts say the semiconductor shortage will last well into next year. If so, there will be other reports like Toyota’s, and the industry will keep limping along.
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