A report from Reuters said that while Mazda was able to bring in chips and crucial auto parts from its European and Japanese suppliers to China to be assembled, it was unable to receive those components from Shanghai during the city’s lockdown.

Mazda’s production output slumped 22 percent to 209,000 vehicles. In turn, global wholesale volume slumped 36 percent, to 166,000 vehicles for the first quarter of its fiscal year.

That said, Mazda said production is already rebounding, with the resumption of activity in Shanghai. It predicted a 19 percent increase in wholesale volume to 1.18 million vehicles this fiscal year.

Mazda forecast that uncertainty in global semiconductor supply will drag into 2023.

Underscoring the vulnerability of its supply chain, Mazda will now seek to include higher parts inventories in Japan and to diversify its component production outside of China for new models.

Mazda’s senior managing executive officer Masahiro Moro, said: “As we continue to do business globally, we must manage the current changes based on the recognition that we are no longer in the era of globalization as we were in the past.”

Due to production disruptions, Mazda reported an operating loss of 19.5 billion yen (USD 144.4 million) for the first quarter of its financial year.