Posted on 28 Feb 2023
Japan's largest automobile manufacturer, Toyota Motor, has quietly revised downwards its domestic production plan for next month, raising concerns among the country's steelmakers that a sustained recovery in carbon and special steel sales for automotive use could still be some distance off.
In mid-February, Toyota had announced that its planned global production volume for March was expected to be approximately 900,000 units, spilt into 350,000 units at its plants in Japan and 550,000 units overseas.
The company's production forecast for the current fiscal year ending March 31 remains at 9.1 million units however, "due in part to the recent impact of semi-conductor parts and other factors," it warned.
Nevertheless, the March forecast, especially for domestic production, would have represented a major increase on the 200,000 units the firm expected to make in January and the 300,000 units it is targeting for this month. Moreover, it was only planning on idling one line at one factory in March – its Motomachi plant in Aichi, central Japan – out of 28 lines in 14 plants nationwide.
However, last week the company began advising its parts suppliers and other vendors that it was revising its domestic production plans lower for February and March to around 275,000 units this month and 320,000 for March, according to a Tokyo-based industry watcher.
"That translates to 13,600 units per day for 20 days this month and 13,900 units/day for 23 days in March," Mysteel Global was told.
Production in April is expected to rise to 14,000 units/day for 20 days of operations, and to 13,900 units/day in May for 18 days of operations – when these will slow to allow workers to enjoy their Golden Week spring holidays.
"Daily output of 14,000 units is still kind of high but we're worried the target may be lowered again," a parts maker commented, adding that if Toyota does cut its target further, component makers could be left with high stocks of feed materials including steel. "We have to be careful with inventory control and planning," he said.
The reason for Toyota's downward revision is not clear but Japan's widening labour shortage could be a factor this time, rather than tight supplies of automotive chips.
"There may be a shortage of assembly line workers at Toyota and among its vendor firms making parts, and certainly among delivery drivers," the Tokyo source noted. The shortage of building workers was recently cited by Nippon Steel as a factor hampering progress on small- and medium-sized construction projects, as reported.
The most recent data from Japan Iron & Steel Federation showed that in January, production of flat rolled steel items used extensively for auto manufacturing were all lower year on year, with that of hot-rolled coils down by 4.7% at 2.92 million tonnes, that of cold-rolled coils lower by 12.1% at 1.19 million tonnes, and that of galvanized sheets off by 8% from January last year at 720,400 tonnes.
Source:Mysteel Global
