Toyota suspends car manufacturing in Japan

Toyota Motor Corp is set to halt operations across all of its assembly facilities in Japan starting from Tuesday afternoon. The suspension is a result of an issue with the production system and will bring a complete stop to domestic output for the world’s leading automaker.

A spokesperson for Toyota mentioned that they are investigating the root cause of the problem, noting that it is probably not connected to a cyberattack. The malfunction has impeded the company’s ability to place orders for necessary components.

To address this, Toyota initially suspended operations at 12 out of its 14 plants on Tuesday morning, leaving only two plants operational. However, by the second shift on Tuesday, all 14 plants will be temporarily shut down. The exact extent of the production loss remains uncertain.

The cumulative impact of these 14 plants is significant, representing approximately one-third of Toyota’s global production. As the largest automaker in the world based on sales, this suspension has notable repercussions for the industry.

This development arises just as Toyota’s Japanese production had been in the process of recovery following a series of reduced output plans attributable to semiconductor shortages. In the first half of the year, production in Japan saw a noteworthy 29% increase, marking the first such rise in two years. On average, daily production for Toyota brands in Japan, excluding Daihatsu and Hino, stood at approximately 13,500 vehicles during this period.

It is worth noting that Toyota faced a disruption last year when one of its suppliers fell victim to a cyberattack. The repercussions of that event led to an output loss of about 13,000 vehicles over the span of a day. The automaker’s operational model relies on just-in-time inventory management, a strategy that optimizes costs but also makes production vulnerable to disruptions in the logistics chain.

Although the exact cause of the current malfunction remains unclear, the broader business landscape in Japan has been on alert due to a wave of harassing phone calls. Some businesses and government offices reported these calls, suspected to originate from China, possibly linked to Japan’s release of treated radioactive water from the Fukushima nuclear power plant into the Pacific.

As a result of these developments, Toyota’s shares experienced a 0.3% decline to 2,429 yen in early trading on the Tokyo stock market.