The biggest car company in the world is cutting 40 percent of global production, with shut-downs at plants at home in Japan. It’s all down to the very much continuing and very much global pandemic. All that and more in The Morning Shift for August 19, 2021.
1st Gear: 40 Percent Cuts In Global Production Over Southeast Asian Outbreaks
When they say that Covid is a global pandemic, they mean in. Outbreaks in Malaysia have led to total shutdowns at plants in Japan and production cuts across its factories worldwide, as Toyota announced on Thursday. From the Wall Street Journal:
The global semiconductor shortage has finally started to bite at Toyota TM -2.95% Motor Corp., highlighting how prolonged disruptions in the global supply chain in the wake of the Covid-19 pandemic are hitting even the best-prepared companies.
Japan’s largest car maker said Thursday it was cutting production in the country by 40% in September because of a shortage of semiconductors. The company declined to say whether it would shut down plants outside of Japan.
The cuts affect most of Toyota’s plants in Japan and some of its bestselling vehicles. One of Toyota’s main plants near its headquarters in Toyota City, which produces both the RAV4 sport-utility vehicle and Corolla sedan, will close from Sept. 1 to Sept. 17. The nearby Tsutsumi plant that produces the Camry and Lexus ES sedans faces a similar period of closure.
The cause of the cutbacks comes down to Covid in Southeast Asia, as the Nikkei reports:
Unlike other automakers, Toyota had been relatively unscathed by the global chip shortage until now. But now other components are starting to run short as Southeast Asian nations, home to key links in its supply chain, struggle to contain the coronavirus, forcing Toyota to halt assembly lines at home and abroad.
“The chip shortage is also a problem, but the big impact is from the coronavirus in Vietnam and Malaysia,” a spokesperson said.
Toyota has been raking in the cash, as the Japan Times reports:
In the April-June quarter, Toyota reported a record net profit, buoyed by robust sales in its key markets like North America and China.
But the major automaker left its earnings forecasts unchanged for the year through next March as the spread of the coronavirus in Southeast Asia, the semiconductor shortage and surging raw material costs have made the outlook unpredictable.
2nd Gear: Tacoma And Tundra Spared
As we have said before, nothing — nothing — will stand between Americans and buying new pickup trucks. They are too desirable for consumers and too profitable for automakers for even a global pandemic to cut them down. That means even amidst this colossal production cut, the Tundra and Tacoma will keep on truckin’ in Texas, as Automotive News reports:
As part of Toyota Motor Corp.’s first major round of global production cuts since the semiconductor shortage began, North American factories alone will lose up to 170,000 vehicles through September because of the raging COVID-19 pandemic and ongoing supplier disruptions.
[...]
Toyota Motor North America said Thursday that the region’s losses in August are expected to range between 60,000 and 90,000 vehicles. In a separate announcement earlier in the day by the parent company in Japan, it expects September output in North America to drop by 80,000 vehicles.
The steep cuts in August output will impact all of Toyota’s assembly plants in the U.S., Mexico and Canada except for its San Antonio factory, which produces the Tacoma and is preparing to launch the next-generation Tundra.
3rd Gear: Ford F-150 Gets A Week Off
Meanwhile at Ford, production cuts are coming for the F-150, per Reuters:
Ford Motor Co. said Wednesday it will temporarily shutter its Kansas City assembly plant that builds its bestselling F-150 pickup truck due to a semiconductor-related parts shortage as a result of the COVID-19 pandemic in Malaysia.
4th Gear: UK Seems Salty It Lost Out On Lithium-Ion Batteries
I am just really enjoying this report from the Guardian talking about how the UK feels a need to control solid state batteries after inventing but not leading the sales of lithium-ion batteries:
Some of Britain’s leading battery researchers have teamed up to develop prototype solid-state batteries, in the hope that the UK can take a leading role in the next stage of the electric car industry.
The FTSE 100 chemicals company Johnson Matthey, the Glencore-backed battery startup Britishvolt, and Oxford University are among the seven institutions that have signed a memorandum of understanding promising to work together on the technology.
[...]
The efforts to kickstart a UK solid-state industry are part of an attempt to avoid a repeat of the experience with lithium ion batteries, which were invented at Oxford University in the 1970s but were then commercialised by Japan’s Sony.
The automotive lithium ion battery industry is now dominated by large Asian companies such as Japan’s Panasonic, China’s BYD and CATL, and Korea’s LG and Samsung. Europe and the US are attempting to catch up, while in the UK Britishvolt and Nissan have outlined plans to build so-called gigafactories – large battery factories – to serve British automotive plants.
5th Gear: Germany Is Having A Hard Time Getting People Back On Public Transit
I am also interested in this story from Der Spiegel talking about how the country is having a hard time getting people to get back on buses and trains:
At the height of the corona pandemic, public transport use collapsed completely. However, contrary to what was expected, the vaccination campaign and normalization of public life have so far not brought about the comeback of climate-friendly mobility. The number of users is expected to double over the next few years so that the climate goals of the transport sector can still be achieved.
“As the backbone of the traffic turnaround, public transport is currently a total failure,” said traffic researcher Andreas Knie from the Berlin Science Center (WZB) to SPIEGEL. That has less to do with the concern about infection and the mask requirement, but with the inability of the often municipal transport companies to adapt to the permanently changing needs of the people.
Germany always seemed like a paradise of public transit when I lived in Berlin, but when I think back to my time living out in the middle of rather rural Saarland, everyone I knew commuted by car.
Reverse: The Ol’ Big One. The Greatest Race In Racing. The Fastest Show On Earth. The First Race At The Raceyard
Something like that. I forget what they call this one.
Neutral: How Are You?
I put 400 miles on a Prius yesterday and was reminded how much I love that car. I feel like I’m trolling even myself when I write that, but it’s true.