Toyota suspends production at its Japan plants after supply chain glitch

Tokyo/Hong Kong

Toyota is suspending operations at all of its Japanese assembly plants as it grapples with a technical glitch that has disrupted its finely-tuned supply chain.

The world’s biggest automaker by sales said Tuesday that 12 of its 14 vehicle factories in the country had paused activity because a problem with its production system was preventing it from processing orders for automotive components. The remaining two facilities will be shut down later on Tuesday.

“We are currently investigating the cause of the problem, and at this stage we do not believe that the production system failure was caused by a cyberattack,” a Toyota spokesperson told CNN.

Toyota was a pioneer of “just-in-time” production, which is based on the delivery of component parts to assembly plants in the right quantities just before they are physically required. The system saves warehouse space and money but is vulnerable to disruption if any link in the chain is broken.

It was not immediately clear how much capacity would be lost. The plants’ combined output accounts for approximately a third of the automaker’s global production, according to Reuters calculations.

The carmaker is rushing to restore operations and will decide late Tuesday whether to resume production on Wednesday, the representative added.

Toyota (TM) is the global leader in car sales, delivering almost 10.5 million cars last year. That’s compared with Volkswagen (VLKAF), which usually competes with the Japanese company for the global sales crown and sold 8.3 million vehicles in 2022.

Shares of Toyota were little changed immediately following the news, slipping 0.2% in Tokyo on Tuesday afternoon.

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Last year, Toyota was forced to shut down Japanese production after a cyberattack on one of its suppliers led to a system failure and a similar issue obtaining automotive parts. The suspension lasted for one day.

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