Two years ago, it was unimaginable that a global car company would cut production. Worldwide demand for cars and light trucks was brisk almost everywhere. That demand remains brisk, but there are not enough cars.
[in-text-ad]
The microchip shortage that has battered the industry prompted Toyota to say it will cut global manufacturing by 100,0000 down to 850,000. That will affect company earnings and the financial health of dealers, and it may push consumers to put off new car purchases for months, if not years.
[nativounit]
Depending on the year, Toyota is the world’s largest manufacturer, as it trades places off and on with Volkswagen. Due to this distinction, it can be claimed that its fortunes are as good a measure as any other for the short-term future of the industry.
[wallst_email_signup]
The news means the two U.S. car companies, Ford and GM, could miss their numbers as well. The stocks of both companies have cratered due to low sales volume and suspicions that they cannot emerge as leaders in the electric vehicle part of the industry. That means current and future sales will be compromised.
[recirclink id=1113593]
Many experts say the semiconductor shortage will last well into next year. If so, there will be other reports like Toyota’s, and the industry will keep limping along.
Toyota Cuts Production by 100,000 as Car Industry Craters
© Junko Kimura / Getty Images
Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
Top Gaining Stocks
Top Losing Stocks