Japanese automobile giants Toyota Motor share prices rose on news that the carmakers have set higher production targets in November. The highest level of production set in recent times has brought cheers to investors despite the underlying shortage in the supply chain of parts.
According to news in Bloomberg, the company plans to manufacture between 850,000 to 900,000 cars next month.
The earlier plans to make 1 million cars were shelved due to the spares supply chain getting hit by the covid pandemic in Southeast Asia. Compared to 828,066 units in November 2020 and 773,551 in November 2019, the next month’s target is clearly the highest in the last three years.
The easing of covid restrictions in Southeast Asia coupled with lower than anticipated production cuts in September and October has boosted the company’s efforts to touch 900,000 production targets. Toyota is maintaining this target for the 12 months ending in March 2022.
Toshihide Kinoshita, an analyst with SMBC Nikko Securities, is of the view that the production output looks normal in November, given the positive trends in the earlier month. The company seems to be on track with its production.
Monday morning, early trading saw the Toyota shares rise by 3.4 %, the most significant jump in intraday since October 8. This stock is already seen a 28% growth in 2021 alone.
With increased production plans till March 22 and improving parts supply, it looks like that the yearly target will be made up as per an analyst with Citi Research. The next fiscal year could see Toyota reach its original target of 1 million cars per month.
According to the Toyotas Purchasing group Chief, Kazunari Kumakura, the worst is over, and they are visualizing lower risks.
