Japan’s Toyota plans to cut production by 5% -20% over the previous plan

Toyota Motor Corp. has told suppliers it will cut domestic production by up to 20% for the three months to April, to ease stress on suppliers struggling with a shortage of chips and other parts.

Toyota suppliers have been forced to face a number of changes in production plans due to the shortage, a Toyota spokesman said, adding that some of the burden on them should be reduced as production declines.

The automaker plans to increase domestic production by about 20% in April, about 10% in May and about 5% in June, the spokesman said.

Toyota President Akio Toyoda said in a meeting with union members on Wednesday that suppliers would be “exhausted” unless there was a “sound” production plan.

Toyoda said April to June would be a “purposeful cooling off” period to make safety and quality a top priority.

The spokesman said the effort is a reflection of Toyoda’s intention to share information with suppliers early so they can plan their production.

Despite the cuts, the spokesman said production levels would still be high from April as the original plan included the need to make up for lost products already.

Toyota plans to produce a record 11 million cars in fiscal year 2022 as long as it can ensure a steady supply of chips.