Toyota Resumes Production in Japan After Plant Shutdown

Toyota Motor Corporation, the world’s largest automaker, is set to restart operations at all 14 of its domestic assembly plants in Japan after a temporary suspension due to a production system malfunction. The incident had brought a significant portion of the automaker’s global production to a standstill.

The malfunction, which Toyota stressed was not the result of a cyberattack, led to a halt in production and the inability to order necessary components for its vehicles. While investigations into the root cause of the glitch are ongoing, the company is taking steps to bring its manufacturing facilities back online.

Starting Wednesday, Toyota will gradually resume operations across its plants in Japan. Initially, 25 production lines at a dozen plants will be operational in the morning, with the remaining two plants joining in the afternoon. These plants collectively contribute to roughly one-third of Toyota’s global production capacity, according to calculations by Reuters.

Prior to this setback, Toyota’s domestic production had been recovering from a series of disruptions caused by semiconductor shortages. In the first half of the year, output saw a notable increase of 29%, marking the first such surge in two years. On average, Toyota produced approximately 13,500 vehicles daily in Japan during this period, excluding vehicles from affiliated automakers Daihatsu and Hino.

This is not the first time Toyota has faced production interruptions. In the past, a cyberattack on a supplier led to a day-long halt in operations, affecting the automaker’s ability to secure essential parts. On that occasion, Toyota managed to resume operations using a backup network.

As Toyota grapples with this latest challenge, analysts are considering the potential impact on the company’s ability to recover the lost production. With output already running at full capacity, the scope for additional production is limited, according to Seiji Sugiura, an analyst at Tokai Tokyo Research Institute. The incident has also had a cascading effect, with Toyota Industries, a group firm, partially suspending operations at two engine plants due to the automaker’s malfunction.

Toyota is renowned for its just-in-time inventory management system, which minimizes costs but leaves production vulnerable to supply chain disruptions. While the exact cause of the recent malfunction remains unclear, the incident occurred at a time when many Japanese businesses and government offices reported harassing phone calls. These calls, believed to originate from China, are speculated to be linked to Japan’s decision to release treated radioactive water from the damaged Fukushima nuclear power plant into the Pacific Ocean.

In the wake of these events, Toyota’s share price experienced some fluctuations, closing down 0.21% at 2,431.5 yen after initially dipping deeper into negative territory during the morning trading session.