Toyota Motor Corp said it is to suspend production at all assembly plants in Japan next week in the wake of a steel factory explosion, dealing a blow to the supply of crucial models including the new Prius hybrid.
All domestic assembly lines are to halt from Monday to Saturday next week, Toyota yesterday said in a statement.
The company counts on Japan for more than 40 percent of vehicle production, including all assembly of the Prius and some Lexus models including the NX crossover.
Toyota’s Japan shutdown springs from the Jan. 8 explosion at Aichi Steel Corp’s Chita plant, which supplies specialty steel for engine, transmission and chassis components. The automaker’s lost output underscores the fragility of the automaker’s supply chain, which was disrupted by Japan’s 2011 earthquake and tsunami.
“It’s always challenging to deal with something like this because maintaining a lean production system is Toyota’s goal,” Advanced Research Japan analyst Koji Endo said, adding that for the Prius and some sport utility vehicles models exported to the US, “supply and demand is relatively tight, so if they have to reduce output, that’s going to be a problem.”
Aichi Steel last month said that the explosion at its Chita plant damaged a furnace and the building’s ceiling.The company, which is 33 percent owned by Toyota, aims to restart operations by the end of next month.
Japan’s steelmakers agreed to cooperate with one another in the event of production disruptions after the 2011 earthquake and tsunami, Aichi Steel spokeswoman Yumi Harada said by telephone.
Toyota had suspended some parts exports and stopped overtime work at Japan plants due to the Aichi Steel explosion. The automaker’s Japan assembly plants are scheduled to restart on Feb. 15, and operations outside Japan will not be suspended, according to the company.
Toyota had been gearing up domestic production as a result of the new Prius, with demand for the new model leading the company to boost Japan output to about 14,000 vehicles per day, Toyota president Akio Toyoda told reporters in December last year.
Toyota’s shares rose 1.4 percent to ¥7,303 yen as of 10:52am in Tokyo trading, while the benchmark TOPIX gained 1.7 percent.
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