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Toyota Halts Production Over Supply Chain Squeeze

Production has been disrupted by a supply chain issue in Japan, and there is concern over a lack of labour in Vietnam due to the Covid-19 pandemic

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Japan factory output
Monday's data showed output of cars and other motor vehicles slumped 17% from the previous month in January, falling for the first time in four months and pulling down the headline output figure by nearly 2.7 percentage points. Photo: AFP.

 

Toyota Motor has halted production at two factories in Japan due to a supply shortage, the company said.

The stoppage means that Toyota cannot return to normal operations in December, as it originally planned.

The carmaker had previously said that it hoped to return to normal production for the first time in seven months in December, after supply shortages disrupted production.

Production at the factories was halted on Wednesday and the suspension is expected to continue for about three days, the company said.

Toyota added this was prompted by a supply chain disruption in Japan as well as a lack of labour in Vietnam due to the Covid-19 pandemic.

 

Target In Sight

The company expects a production fall of 3,500 vehicles from the stoppage, but will keep its target to produce 9 million vehicles worldwide during the financial year ending on March 31.

Toyota, along with Honda and Nissan, have all indicated that production will return to normal by the end of the year as Southeast Asia supply shortages largely dissipate.

“One potential downside risk though is factories possibly closing again in Vietnam where there has been a resurgence in cases,” Tom Learmouth, Japan economist at Capital Economics, said.

 

  • Reuters with additional editing by George Russell

 

 

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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