Honda Motor Co Ltd (NYSE:HMC) plunged over 1.28% to trade at $25.44 on Thursday as firm would decrease car production at two Japanese facilities by up to 40% for the rest of the month due to persistent supply chain and logistical issues.
The decrease might be interpreted as a signal that automakers may be unable to increase production levels in the second half of the fiscal year to end-March to compensate for a dent made by a continuous chip shortage and supply chain interruptions in the first half of the business year.
Honda’s assembly factory in Saitama prefecture, north of Tokyo, will reduce output by around 40% this month, while two lines at its Suzuka plant in western Japan will reduce output by roughly 20%.
Honda cited COVID-19 breakouts and semiconductor shortages for delays in getting components and logistics. The drop in production will affect a number of cars, including the Vezel SUV, Stepwgn minivan, and Civic small car. Last month, the manufacturer announced a 40% reduction in vehicle production in Saitama and a 30% reduction at Suzuka for early September.
Following an initial drop, Honda’s output at those two factories returned to normal in June, but it began making modifications again the following month, as previously stated.
Toyota Motor Corp maintained its record worldwide car production target of 9.7 million for the current fiscal year ending March 31, 2023, saying its production and sales outlook will strengthen beginning in August.
Toyota stated last month that it projected to build 850,000 vehicles globally in September and that it hoped to increase production through November, depending on parts and people supply.
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