Japan’s auto industry struggles with rising raw material prices

Japanese car maker Toyota has had to warn about an unprecedented increase in input materials, causing the company’s full-year profit to drop by one-fifth. Not to mention, Toyota also announced that it will suspend the operation of 14 production lines at 8 factories in Japan for up to 6 days, from May 16.

Mr. Kenta Kon – Chief Financial Officer Toyota Corporation “Raw material costs and market volatility have reached 1.45 trillion yen ($11.1 billion) – an all-time high. In the face of continued rising raw material prices such as So, we have to find a way to reduce the input material as much as possible, by replacing it with cheaper materials.”

It is expected that Toyota’s worldwide production of vehicles in May will reach 750,000 units. However, with the suspension of domestic production plants, the number of vehicles produced by the company will decrease to 700,000 units.

Many Japanese car manufacturers are going through tough times. (Artwork – Photo: CNN)

In addition to Toyota, a number of other Japanese automakers are also affected by the cost of input materials. Not to mention the strict epidemic prevention measures in China in the past time, making supply chains even more congested.

As a result, in April alone, Mazda closed its main production plant in Hiroshima and Hofu factory in Yamaguchi Prefecture for 8 days. Subaru also stopped working at 3 factories for 2 days.

Honda said that the Suzuka factory in Mie prefecture reduced production by 50% compared to the original plan in April. Yorii factory in Saitama province will reduce output by 30%.

“The company is going through a very difficult period because in addition to the shortage of semiconductors affecting production volume, a significant increase in metal prices is also a problem, especially in the last year,” said Kohei. Takeuchi – Vice President of Honda Corporation said.

However, with the reopening of Shanghai city, China after a series of days of blockade, the management of Honda Group expects that the production and logistics activities of the enterprises supplying the suppliers are expected to continue. car manufacturing will soon be restored to 60-80%.

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