Toyota's Japan production at standstill as system failure hits assembly plants

Toyota is a pioneer of just-in-time inventory management, which keeps down costs but means supply chain snarls put production at risk.

Toyota suspended 12 plants in its home market from Tuesday morning and added the final two from the afternoon, the spokesperson said. (Image credit: Reuters)

Toyota Motor Corp on Tuesday said it has suspended operations at all 14 of its assembly plants in Japan due to a production system malfunction, bringing domestic output to a standstill at the world's biggest-selling automaker. The glitch is preventing Toyota from ordering components and its cause is under investigation, though it is "likely not due to a cyberattack", a spokesperson said.

Toyota suspended 12 plants in its home market from Tuesday morning and added the final two from the afternoon, the spokesperson said. It was unclear how much output would be lost. The plants together account for about a third of the automaker's global production, Reuters calculations showed.

Toyota's domestic production had been on the rebound after a series of output cuts it blamed on semiconductor shortage. Output was up 29% in January-June, the first such increase in two years. Its Japan output averaged about 13,500 vehicles daily in the first half of the year, Reuters calculations showed. That excludes vehicles from group automakers Daihatsu and Hino.

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Operations were halted for a day last year when a supplier suffered a cyberattack, hampering Toyota's ability to order parts. Toyota resumed operations using a back-up network. Tuesday's incident is having a knock-on effect. Group firm Toyota Industries said it has partially suspended operations at two engine plants due to the automaker's glitch.

Toyota is a pioneer of just-in-time inventory management, which keeps down costs but means supply chain snarls put production at risk. While the cause of the latest malfunction was unclear, corporate Japan has been on alert in recent days as businesses and government offices reported harassing phone calls.

The government said the calls were likely from China and related to Japan's release of treated radioactive water from the wrecked Fukushima nuclear power plant into the Pacific Ocean.

Toyota's share price was up 0.12 per cent at 2,439 yen in afternoon trade after spending much of the morning in negative territory.

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