Honda to slash output by up to 40% at Japan plants due to supply snag

TOKYO (Reuters) -Honda Motor Co said on Thursday it would reduce car output by up to 40% at two Japanese plants for the rest of the month due to ongoing supply chain and logistical problems.

The reduction could be seen as a warning that automakers may not be able to lift production volumes in the second half of the financial year to end-March to make up for a dent caused by a persistent shortage of chips and supply chain disruptions in the first half of the business year.

Honda’s assembly plant in Saitama prefecture, north of Tokyo, will slash output by about 40% this month, while two lines at its Suzuka plant in western Japan will cut back production by about 20% in September.

Honda blamed delays in receiving parts and logistics on COVID-19 outbreaks and semiconductor shortages. The output reduction will affect a variety of vehicles, including the Vezel sports utility vehicle, Stepwgn minivan and Civic compact car.

The automaker said last month it would slash vehicle production at Saitama by 40% and at Suzuka by 30% for early September.

Honda’s production at those two plants returned to normal in June after an earlier reduction but it began making adjustments again the next month, it previously said.

Honda rival Toyota Motor Corp remained bullish on its production plan, maintaining its record global vehicle production target of 9.7 million for the current financial year to end-March 2023, saying its production and sales outlook would improve from August onwards.

Toyota said last month it expected to produce 850,000 vehicles globally in September and seek to raise production through November, depending on supplies of parts and personnel.

(Reporting by Satoshi Sugiyama; Editing by Peter Graff and Tom Hogue)