Toyota Motor Corp.’s global output sank for the fourth straight month as a shortage of semiconductors and supply chain disruptions caused by Covid lockdowns in China hurt production. 

Output fell 8.6% in July from a year earlier to 706,547 vehicles, the Japanese automaker said in a statement Tuesday. Sales declined 7.2% to 797,179 units, extending a slump for an 11th consecutive month. 

A shortage of computer chips that go into many car parts, higher raw material costs, and frequent shutdowns at factories in China because of Covid-related curbs have thrown global auto assembly lines in turmoil. Still, Toyota is sticking to its production target of 9.7 million vehicles for the fiscal year through March 2023 and has also kept its profit outlook.  

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Bloomberg reports that while Toyota’s overseas output climbed to a record for July, volumes still fell short of target. Output in Japan slid 28.2% from a year earlier. 

Even though the yen has weakened against the US dollar this year, meaning the carmaker’s products are more competitive overseas and its income gets a boost in the local currency, executives this month said they aren’t confident enough to raise profit guidance. They cited “many uncertainties ahead,” such as downward pressure on the economy and potential interest rate hikes in other nations.

Toyota shares are little changed since the start of the year and traded 0.7% higher in Tokyo on Tuesday. 

Separately, Nissan Motor Co. said July production climbed 9.4% to 284,755 vehicles, while sales dropped 13% to 265,905 units, extending declines for a 13th straight month. Honda Motor Co. said output rose 5.9% in the month to 343,205 vehicles, the second consecutive increase.

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