Production System Malfunction Halts Toyota’s Assembly Plants

On Tuesday, Toyota Motor suspended operations at all 14 of its assembly plants in Japan due to a production system malfunction. This suspension has brought domestic output to a standstill at the world’s biggest-selling automaker.

Cause of the Glitch Under Investigation

The cause of the glitch is currently under investigation. However, a spokesperson stated that it is “likely not due to a cyberattack.” The malfunction is preventing Toyota from ordering components, leading to the suspension of operations.

Domestic Production Impact

Toyota has suspended 12 plants in its home market from Tuesday morning, with the final two added in the afternoon. The total impact on output is still unclear. These 14 plants account for about a third of the automaker’s global production.

Rebound in Domestic Production

Toyota’s domestic production was showing signs of recovery after several output cuts attributed to a semiconductor shortage. In January-June, output increased by 29%, marking the first such increase in two years.

Operational Halt Last Year

Last year, Toyota faced a one-day suspension of operations when a supplier experienced a cyberattack. This attack hampered the automaker’s ability to order parts. However, Toyota resumed operations using a back-up network.

Knock-on Effect for Toyota Industries

This incident is having a knock-on effect on Toyota Industries, a group firm. Due to the automaker’s glitch, Toyota Industries has partially suspended operations at two engine plants.

Just-in-Time Inventory Management

Toyota is well-known for its pioneering approach to just-in-time inventory management. While this approach helps keep costs down, it also makes the production process vulnerable to supply chain snarls.

Calls of Concern

In recent days, corporate Japan has been on alert due to harassing phone calls received by businesses and government offices. These calls are likely from China and are related to Japan’s release of treated radioactive water from the wrecked Fukushima nuclear power plant into the Pacific Ocean.

Stock Market Reaction

Despite the operational challenges, Toyota’s share price was up 0.12% at 2,439 yen in afternoon trade, showing resilience amidst the situation.