Japan’s Subaru cuts annual output target as chip shortage drags on

TOKYO, Feb 8 (Reuters) – Japan’s Subaru Corp (7270.T) slashed its annual output target by nearly 10% on Wednesday amid ongoing fallout from a semiconductor shortage that continues to hamper automakers around the world.

The carmaker said the shortages were most acute among parts for immediate delivery in the spot market and it expected the lack of supply to last at most until around June before recovering.

Subaru said it now expects to produce 880,000 vehicles this fiscal year through March, down 9.3% from a previous forecast of 970,000 units.

“In the third quarter, we managed to keep the decline to about 20,000 units compared to our plans through our efforts,” said Katsuyuki Mizuma, Subaru’s chief financial officer.

In the fourth quarter ending March 31, Subaru expects to make 70,000 fewer vehicles than previously planned, Mizuma said.

The company’s shares slipped following the release of the results, ending 1.9% lower at 2,118 yen compared to a flat broader market (.TOPX).

 Subaru, in which Toyota Motor Corp (7203.T) owns a 20% stake, hopes to reach global production of 1 million vehicles next financial year, he said.

After dialling back output following the outbreak of COVID-19, many automakers have been playing catch-up in terms of production, with chipmakers sending shipments to the consumer electronics industry.

Subaru on Wednesday lowered its annual global sales forecast by 5.4% to 870,000 vehicles from its previous forecast, though that still marked an 18.5% rise compared to the 2022 financial year.

 Most of the expected decline in global sales is in the U.S. market, where it sells two-thirds of its cars, including the popular Forester and Outback models.

The company kept its annual operating profit forecast unchanged at 300 billion yen ($2.29 billion), citing its efforts to control costs and boost efficiency from manufacturing through to sales, as well as exchange rate assumptions.

($1 = 131.0900 yen)

Reporting by Daniel Leussink; Editing by Jamie Freed