In a significant disruption to its manufacturing operations, Toyota Motor Corp announced on Tuesday that it has suspended operations at all 14 of its assembly plants in Japan.
This shutdown has brought domestic production to a standstill at the world’s largest automaker.
The production halt was attributed to a malfunction in Toyota’s production system, which has hindered the company’s ability to order essential components. A spokesperson for Toyota stated that the exact cause of the glitch is under investigation but clarified that it is “likely not due to a cyberattack.”
The suspension of operations began with 12 plants in the morning and was extended to the final two in the afternoon, affecting a substantial portion of Toyota’s production capacity. These plants collectively account for approximately one-third of the automaker’s global production, according to Reuters calculations.
This disruption comes at a crucial time for Toyota, which had been witnessing a rebound in its domestic production. The company had previously faced output cuts attributed to the global semiconductor shortage. Nevertheless, its production had increased by 29% during the first half of the year, marking the first significant rise in two years.
Toyota’s daily output in Japan averaged around 13,500 vehicles in the first half of the year, excluding vehicles produced by affiliated automakers Daihatsu and Hino.
It’s worth noting that Toyota’s operations were previously halted for a day last year when a supplier suffered a cyberattack, affecting the company’s ability to procure necessary parts. During that incident, Toyota had to resort to using a backup network to resume operations.
The repercussions of Tuesday’s production halt are extending beyond Toyota itself. Group company Toyota Industries has also partially suspended operations at two engine plants due to the glitch experienced by the automaker.
Toyota is renowned for its just-in-time inventory management system, which helps in cost control but also makes the production process vulnerable to supply chain disruptions. While the exact cause of the current malfunction remains unclear, it has raised concerns in corporate Japan, especially in light of recent reports of harassing phone calls received by businesses and government offices.
Authorities have suggested that these calls are likely originating from China and may be related to Japan’s decision to release treated radioactive water from the damaged Fukushima nuclear power plant into the Pacific Ocean.
Despite the production setback, Toyota’s share price showed resilience, rebounding to a 0.12% increase at 2,439 yen in afternoon trading after initially experiencing a decline in the morning. The situation remains fluid as Toyota works to resolve the production system malfunction and resume its operations.
