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Global automakers are slashing production forecasts, which will cost the world hundreds of thousands of cars in the coming months. Yet any worries about this outcome belie the underlying problems of an industry marred by slowing sales and brimming output before the pandemic. In reality, the latest cuts will only help a much-needed (even if painful) rebalancing of the sector.

The cutbacks have come hard and fast: The world’s largest automaker, Toyota Motor Corp., this month revised down its production forecast for the year. Other Japanese manufacturers such as Nissan Motor Co. and Honda Motor Co. have done the same, bringing the combined figure to over 1 million cars. In the U.K., output fell sharply in July, marking the worst performance in that month since 1956, while production could be lowered by 1.5 million units for the whole year in North America. Europe’s new car sales in August dropped 18% from a year earlier, following a 23% fall the previous month.

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