Chip and container shortages force Subaru to cut annual production plan

Japanese automaker Subaru Corp has cut its production plan for this fiscal year by around 58,000 vehicles, mainly due to a global chip shortage, it said on Friday.

While the car maker expects the impact of the shortage to continue into the next fiscal year, which begins on April 1, it is unclear how many vehicles will be affected, CFO Toshiaki Okada said.

"We are making efforts day and night to procure semiconductor parts as much as possible and to minimise production cuts," he said.

The automaker could suspend or adjust plant operations in the future if it cannot procure enough chips, Okada said in an earnings call. He said Subaru would maintain employment levels at its plant in Gunma, Japan, while reducing overtime work and holiday shifts.

The roughly 58,000 vehicles represents a reduction of about 6.6% of its production plan for this fiscal year, which it revised to 823,400 from 881,300 in the previous quarter.

In addition to a 48,000 production cut caused by the chip shortage, Subaru said it had reduced its output by another 10,000 vehicles due to a global shortage of shipping containers.

Subaru on Friday revised its operating profit forecast for the year to end-March down to 100bn yen (roughly R14,179,074,840) from an earlier estimate of 110bn yen (roughly R15,606,228,000) due to the global shortage of chip supplies.

That compares with an average 132.11bn yen (roughly R18,735,646,579) from a Refinitiv consensus forecast from 17 analysts.

Subaru reported a 17% jump in its operating profit in the October-December period as its global vehicle sales continued to recover since the previous quarter.

It posted an operating profit of 67.6bn yen (roughly R9,586,119,400) in the third quarter compared with a 57.8bn yen (roughly R8,196,415,700) profit a year ago, and exceeding an estimated average of 34.99bn yen (roughly R4,961,522,230) profit from seven analysts surveyed by Refinitiv.