Toyota to Cut Production 15 Percent Amid Chip Shortages

The Japanese automaker Toyota said on Friday that it would cut November production targets at home and abroad by as much as 15 percent as the pandemic and a global semiconductor shortage have made it difficult for the company to meet its short-term manufacturing goals.

Automakers worldwide have struggled to keep up with rebounding demand for their vehicles as pandemic restrictions in the world’s largest auto markets ease and consumers look to make up for lost time. The European Automobile Manufacturers’ Association said Friday that new car registrations in September were down 25 percent from a year ago, largely because of dealers don’t have enough cars to sell because of a shortage of semiconductors.

The global shortage of semiconductors — caused by such factors as supply chain woes and surging sales of home electronics during lockdowns — has hit the automotive industry hard, with Volkswagen reporting a 28 percent decline for September, the European manufacturers association said. Many automakers reduced orders for parts last year because of uncertainty about the pandemic’s effect on sales, and they are now struggling to source new components.

Other industry players have announced cutbacks in their manufacturing plans as a result, but Toyota, which had stockpiled chips, was able to hold out longer than its competitors.

In September, however, Toyota announced substantial cuts to its production targets for September and October, citing the lack of semiconductors and difficulties obtaining parts from suppliers in Southeast Asia hit by the coronavirus.

Rents are shooting higher after a brief pandemic slump, burdening households and fueling overall inflation. That is bad news for the Federal Reserve, because it could make the latest rapid price gains last longer. It’s also problematic for the White House because it hits households right in their pocketbooks, diminishing well-being and fueling unhappiness among voters.

A combination of factors seems to have created a perfect storm that pushed the Consumer Price Index measure of rent up 0.5 percent in September from the month before, the fastest pace in about 20 years.

That’s a concern for the Fed, because housing prices tend to move slowly and once they go up, they tend to stay up for a while, Jeanna Smialek writes for The New York Times. Rent data also feed into what is called “owners’ equivalent rent” — which tries to put a price on how much owners would pay for housing if they hadn’t bought a home. Together, housing measures make up about a third of the overall Consumer Price Index.

Overall consumer prices have jumped sharply in 2021, climbing 5.4 percent in September from the prior year. Fed officials have been betting that the move is temporary, but they are watching housing measures carefully as a risk to that outlook.

Rent is a big part of consumers’ experience with prices, so it could help shape their expectations about future cost increases.

Just as economies seemed to be returning to something like normal, an energy crunch has hit Britain, the rest of Europe and much of the world.

Natural gas, the main focus of this squeeze, is crucial for generating electricity, running factories and heating homes. It is also seen by some as a transition fuel away from highly polluting coal.

Prices for natural gas have risen about sixfold, to record levels. The surge means the wholesale price of electricity has reached stratospheric levels, and consumers, battered by the pandemic, are hit by big increases in their home energy bills. These high costs are also undermining the economics of companies that make fertilizer, steel, glass and other materials that require a lot of electricity.

Britain, whose power system depends heavily on gas, is taking some of the hardest blows, creating major headaches for the government of Prime Minister Boris Johnson

The jump in gas prices is also making geopolitical waves. Russia, Europe’s largest gas supplier, is being blamed for manipulating prices. The United States, in turn, has warned Moscow not to try to exploit the gas crunch for its own ends. The pinch could open the way for more exports of liquefied natural gas from shale drilling in the United States.

Stanley Reed, who reports on energy and the environment for The New York Times from London, answers questions about the crunch, including why natural gas prices have jumped so high and why Britain is in such bad shape. READ THE ARTICLE →