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Why is Toyota slashing car production by 40 percent?

Answer: Because of the chip shortage.

The Toyota logo on a car.
With everything else that’s been happening in the news lately, it may have been easy to forget that the world is still suffering from a significant shortage of semiconductor chips. But Toyota certainly hasn’t forgotten. The company announced Thursday that it would be cutting production globally by 40 percent through the end of next month due to a shortage of chips.

All but one of the automaker’s North American plants will suspend production through September. Only the plant in San Antonio, Texas, which builds the well-known Tacoma and Tundra pickups, will still be operational. Toyota estimates that this drop in production will result in 360,000 fewer cars being built.

“While the situation remains fluid and complex, our manufacturing and supply chain teams have worked diligently to develop countermeasures to minimize the impact on production,” the company said in a statement.
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