Toyota has revealed it is set to cut worldwide vehicle production by 40% in September over the global microchip shortage.
The carmaker had made plans to make almost 900,000 cars by September but has reduced their target to 540,000 vehicles.
The pandemic boosted demand for home appliances that use chips which in turn hit the production chips.
In July the boss of chipmaker Intel, Pat Gelsinger said the worst of the global chip shortage was yet to come.
Gelsinger predicted the shortage would get worse in the “second half of this year” and it would be “a year or two” before supplies returned to normal.
The world’s second-biggest car producer after Toyota, Volkswagen warned that it may also be forced to cut output.
Volkswagen on Thursday said, “We currently expect supply of chips in the third quarter to be very volatile and tight. We can’t rule out further changes to production.”
Toyota’s other rivals; General Motors, Ford, Nissan, Daimler, BMW and Renault have scaled back production in the face of the global chip shortage.