Toyota face further production stoppages due to shortages
Automaker Toyota Motor Corp. has said that it would extend stoppages at some of its factories in Japan due to a shortage of parts coming from plants in Southeast Asia. The halts in production are because of further Covid-19 restrictions and lockdowns in the continent. The company said that the lost production will now amount to around 14,000 vehicles in December alone.
In an email sent to the BBC, Toyota said the disruptions were due to “lower attendance rate at suppliers in Southeast Asia due to the re-spread of Covid-19 and tight logistics situation in Japan.” The company also said it aimed to stick to its annual global production target for the year: “We would like to maintain 9 million units, but we will keep a close eye on the situation.”
Automakers and rivals of Toyota, including BMW, Nissan and Ford have also reported supply chain disruptions. The Japanese economy is taking a hit because of the continued disruptions. Shipments of cars were hit hard, as figures were down by almost 37% from the same time in 2020. Car exports to Japan’s two largest trading partners, China and the US, dropped by around 50%, according to data from the country’s Ministry of Finance.
Read more here
Air freight costs hit record high
The cost of transporting air cargo around the world has peaked to record levels during the run-up to Christmas. The prices of moving air freight have nearly doubled on key air freight routes linking China to consumers in the United States and Europe recently, with prices on routes from Shanghai to North America reaching $14 per kilogram for the first time.
Since it is the quickest transportation method and because of the crisis in the shipping industry, there has been an increase in companies using air freight to move finished goods in time for Christmas. As well as this, there has been a rush to order Covid-19 tests and personal protective equipment into Europe to deal with the Omicron coronavirus variant, according to industry executives.
“Everyone knows if they want something on to the shelves before Christmas, they have to use air freight,” said Yngve Ruud, head of global airfreight at Kuehne+Nagel, one of the world’s largest freight forwarders. Bharat Ahir, chief executive of supply chain consultancy 28one also commented on the recent events, implying that with supply chains under pressure, the impact will be felt by consumers.
Interested in reading more? Click here
Intel set to invest $7 billion in chip plant in Malaysia
The multinational technology company Intel has revealed that it will be investing over $7 billion to establish a new chip-packing and testing site in Malaysia, Chief Executive Pat Gelsinger said this week. This announcement will be welcomed by companies around the world after the global semiconductor shortage, as well as by local people, as the investment is planned to create over 4,000 Intel jobs and more than 5,000 construction jobs according to the Malaysian government.
The country’s chip assembly industry, which accounts for over a tenth of global trade worth more than $20 billion, has warned that semiconductor shortages will last for another two years at a minimum. The new advanced packaging factory designed by Intel is expected to begin production in 2024 according to Gelsinger. He also added that the company hopes to announce further locations in the United States and Europe next year, which will further boost the production of chips.
“Overall, the semiconductor industry this year will grow more than it has in the last two to three decades. But still the gaps are large… and I predict that the limitations of the shortages will persist into 2023,” said Pat Gelsinger. Malaysian Minister of International Trade and Industry Mohamed Azmin Ali said that “this undertaking is indeed timely given the bullish global demand driven by the chip shortages and the potential challenges arising from the recovery of the pandemic globally.”
Click here to read more