The news: The world’s number two carmaker, and Japan’s leading car manufacturer, said on Thursday that it was cutting its production in Japan and North America by 40% and is shutting down factories, per The Wall Street Journal. This could in turn lead to vehicle shortages and price hikes.
How we got here: The global chip shortage has put mounting pressure on automakers, PC, and electronics manufacturers, whose chip stockpiles have been depleted.
The bigger picture: Thanks to component stockpiles and longstanding relationships with its suppliers, Toyota was able to insulate itself from the early effects of the global chip shortage, per The Wall Street Journal. Competitors like Ford, Fiat Chrysler, and Nissan have felt the pinch more intensely.
The global chip shortage, which is expected to run into 2023, is showing that even the best-prepared companies are burning through chip supplies and are forced to cut production.