The world's top automaker reported a decline in global production in April. It slashed June production expectations, indicating semiconductor chip shortage and supply chain disruptions in China due to factory shutdowns weighed on production.
Toyota reported Monday that April sales were 692,259, which fell 9.1% from the same month last year, missing the mark of a planned 750,000 vehicles worldwide, according to Reuters.
Last week, the automaker slashed its June production twice. In total, the company has now cut 150,000 vehicles to 800,000.
Toyota expects to produce 9.7 million vehicles worldwide for the entire year, though it could lower estimates later this summer.
The weak figures come as Japan's factory output tumbled last month as China's zero COVID policies hampered manufacturing and dampened prospects for growth in the world's third-largest economy.
Economic storm clouds are gathering over Japan as Shigeto Nagai, head of Japan economics at Oxford Economics, warned a more significant risk to Japan's economy than slowing industrial activity is private consumption.
"Although we are now seeing an impressive recovery driven by pent-up demand, the strength of consumption will be severely constrained by a sharp squeeze in real household income caused by a combination of higher inflation and stagnant wage growth.
"The weak yen is also clearly a negative to households and consumption, which is supposed to take a lead in the coming recovery after the coronavirus," Nagai told Al Jazeera.
However, Nagai believes the industrial production slowdown is "temporary" and could take another few months to pick back up again as China reopens.
"I think the slowdown in industrial production today is temporary mainly reflecting disruptions in supply chains and production activities by COVID-related lockdowns in China.
"Japan's exports and production will continue to be affected by the lockdowns for another few months but will regain momentum thereafter. We have limited concern about the prospect of Japan's manufacturing activities amid strong demand for high-end capital goods and autos. The weak yen will also help exports," he said.
Besides Toyota, Honda and Nissan, two other top automakers in the country announced Monday that output last month slid on a year-on-year basis because of chip shortages and other supply disruptions related to China lockdowns.