- The RAV4 sits near the top of the list of models facing the deepest cuts.
- IMV-based models like the Hilux, Fortuner, and Land Cruiser FJ are caught up.
- Nissan has already revised export plans as regional tensions continue growing.
As the war in Iran continues to drag on and the Strait of Hormuz remains effectively blocked, car manufacturers are starting to feel the effects. Toyota is one of them. The company has now told suppliers it will trim overseas production by roughly 83,000 vehicles between now and November.
Word went out to the supply base this week, with Toyota citing rising fuel prices and weakening Middle East demand as the main drivers behind the production cuts. The Toyota RAV4 sits near the top of the list of models taking the biggest reductions.
Read: Toyota Is Preparing To Build Millions Of These Instead Of EVs
In addition, vehicles based on Toyota’s Innovative International Multi-purpose Vehicle platform will be affected by the production cuts. Among the models that use this platform are the Toyota Hilux, Fortuner, and the new Land Cruiser FJ. The cuts will also impact the Toyota Probox and Corolla Touring.
As reported by Nikkei Asia, Toyota first lowered production in Japan by 40,000 vehicles bound for the Middle East throughout March and April. It also suspended production on one of the lines at its Tsutsumi Plant in Aichi Prefecture for two days this month and halted work on the second line at its Gifu Auto Body site for one day.
According to Toyota accounting chief Takanori Azuma, the company typically exports between 500,000 and 600,000 vehicles annually to the Middle East, with nearly half expected to be affected by the disruption.
Toyota’s Profits Are Falling
Despite the war impacting Toyota’s production plans, the automaker’s most recent forecast for the year indicated it will end the current business year having produced more than 10 million vehicles from the Toyota and Lexus brands, a 1 percent increase. However, consolidated net profit is expected to fall 22 percent to 3 trillion yen or $18.89 billion.
Toyota also warned that the earnings outlook may worsen further if instability in the Middle East and crude oil markets intensifies beyond expectations.
Last month, it was revealed that due to the ongoing conflict in Iran, 1,400 Nissan Patrols that were destined for the Middle East have instead been diverted to the United States, where they will become Armadas. It’s an interesting development and exemplifies just how important it is for major car brands to think and react quickly to shifting global conditions.
