Japan’s factory output drops as car production slows

Industrial output in Japan declined for two consecutive months in August. A surge in COVID-19 cases in Asia and persisting chip shortage continue to disrupt supply chain in car production.

Factory output dropped 3.2% in August from the previous month, official data showed on Thursday. It was attributed to weaker car production and electronic machines. The decline was worse than a 0.5% fall forecast of economists, placing lower than the 1.5% drop in July.

Major Japanese automakers like Toyota Motor Corp, Nissan Motor Co, and Honda Motor Co have grappled with production cuts since late August due to a shortage in components. The industry could face this issue until October.

Meanwhile, Suzuki Motor Corp reported the closure of its two assemble plants for one to three days in October due to supply shortages.

Manufacturers expected a recovery of 0.2% in September and 6.8% in October.