Toyota Motor Corp (7203.T) has announced the temporary suspension of operations at all its assembly plants in Japan, effective from Tuesday afternoon. This unprecedented move is attributed to a significant malfunction within the company’s production system, a setback that is anticipated to halt domestic production for the world’s leading automaker.
According to a company spokesperson, Toyota is actively investigating the root cause of the issue, stating that initial indications suggest that it is “unlikely to be the result of a cyberattack.” The malfunction has hindered the company’s ability to place orders for essential components, further complicating the situation.
The suspension initially impacted operations at twelve plants starting Tuesday morning, with the remaining two plants continuing their operations. However, the spokesperson confirmed that by the second shift on Tuesday, all fourteen plants will have ceased production. The extent of the production loss remains uncertain at this time.
Collectively, these fourteen plants are responsible for roughly one-third of Toyota’s global production, as estimated by Reuters calculations. Notably, Toyota holds the position of the world’s largest automaker in terms of sales.
This development comes at a crucial juncture for Toyota, as its Japanese production had been rebounding from a series of setbacks primarily linked to semiconductor shortages. Impressively, production in Japan surged by 29% during the first half of the current year, marking the first substantial increase in two years.
For Toyota’s various brands, excluding Daihatsu and Hino, the daily average production rate in Japan during the first half of the year was approximately 13,500 vehicles. This calculation, based on working days and excluding holidays, underscores the company’s significant production capacity.
It’s important to recall that Toyota confronted a similar production halt last year due to a cyberattack on one of its suppliers. This single-day disruption had resulted in an output loss of around 13,000 vehicles.
Toyota has long been recognized for its pioneering approach to just-in-time inventory management, which optimizes costs but also renders the production process vulnerable to disruptions in the intricate logistics chain.
Though the precise cause of the current malfunction remains unclear, the corporate landscape in Japan has been on alert in recent days following reports of an influx of harassing phone calls. There’s growing suspicion that these calls, attributed to China, are in some way connected to Japan’s controversial decision to release treated radioactive water from the Fukushima nuclear power plant into the Pacific.
As news of the assembly plant suspensions circulated, Toyota’s stock experienced a slight decline of 0.3%, trading at 2,429 yen in the early Tokyo market.
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