By on January 20, 2022

Toyota Motor Corp is currently having to contend with idle factories in Asia, reducing the automaker’s estimated output by over 47,000 units this month. Shockingly, it’s not alleged to have anything to do with the semiconductor shortage that’s been wreaking havoc on Western markets.

With chip production having been localized primarily in China and Taiwan, Asian suppliers have had better access to them. But Eastern markets have still been subjected to other routine plant closures due to supply chain restrictions stemming from the pandemic. Existing protocols in China, combined with renewed restrictions in Japan, have created a situation impacting numerous automakers with Toyota announcing this week that it probably won’t reach its goal of manufacturing 9 million cars this year — though it made sure to include the ongoing semiconductor issue as relevant. 

After removing the brunt of its COVID-19 restrictions in October, Japan reintroduced some earlier this month in an effort to mitigate rising infection rates of the Omicron variant. Meanwhile, China has continued mandating aggressive testing protocols and harsh restrictions that have caused widespread concerns about global supply chains for 2022. Single infections frequently result in work stoppages and port closures inside the country that have had major ramifications. The Wall Street Journal covered the issue today, expressing fears that Chinese citizens have been running out of food in regions with the worst border restrictions while addressing the broader implications of exported goods being perpetually delayed.

The situation has forced facilities essential for Toyota’s operations in China to remain closed for over a week. This had a ripple effect on the surrounding region, resulting in additional closures in Japan. However, Bloomberg reported that Japan’s own restrictions also played a contributing factor while the company itself was less specific in citing that several important suppliers were having difficulties. All told, Toyota confirmed that over 20 assembly lines split up between 11 plants will need to be idled this month.

From Bloomberg:

A shift on a second production line is also being halted at Toyota’s Tsutsumi plant Thursday. That’s on top of another shift on a different line at the central Japan plant that’s been halted from Wednesday, causing a cut to output of around 1,500 vehicles. Toyota’s popular Camry sedan is among the models manufactured at the factory in Aichi Prefecture.

The factory suspensions are the latest of several setbacks the world’s top-selling automaker has faced as the highly contagious omicron coronavirus variant takes hold in Asia. Toyota also idled operations in Tianjin, China, as the local government carried out mass testing due to a virus flareup in the port city near Beijing.

Toyota said this week it is unlikely to reach its goal of making 9 million cars this fiscal year due to persistent chip shortages plaguing the auto industry. The company’s shares then slumped 5 [percent] Wednesday, their biggest loss since December 2018. They rebounded 1.9 [percent] as of 1:49 p.m. Thursday in Tokyo.

The automaker won’t be alone, however. Other Japanese brands have similarly attributed reduced output to a combination of COVID-19 restrictions and an insufficient number of semiconductors. On Thursday, Honda Motor Co. said its Suzuka plant in the Mie Prefecture would be operating at around 90 percent capacity through next month. Nissan likewise experienced widespread factory issues over the summer. But recently told Bloomberg that it’s in a much better position going into 2022, with CEO Makoto Uchida explaining that the situation still remains fluid.

“We expect the market to recover but the COVID situation is uncertain and we need to be prepared and continue to monitor,” he said.

[Image: Toyota]

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7 Comments on “Toyota Confronting Widespread Factory Stalls in Asia...”

  • avatar
    SCE to AUX

    “With chip production having been localized primarily in China and Taiwan, Asian suppliers have had better access to them.”

    I doubt geography has much to do with access; it’s about the money.

    Say, how did Tesla’s volume jump 40% in 2020, and another 84% in 2021? Don’t they use chips, too?

    • 0 avatar
      Matt Posky

      I’ve begun to assume companies are just using the chip shortage as a catch-all excuse for cratering productivity and general supply chain problems.

      • 0 avatar
        SCE to AUX


        So you assume:
        a) Tesla is immune to productivity and supply chain problems, or
        b) Every other mfr is lying about the reasons for productivity and supply chain problems.

        Come on, the difference in how Tesla is performing is quite stark. As I-L-O says below, I do think they make some of their own chips (custom outsourced, actually), but I’ve read that they also re-wrote their code to utilize the chips they could actually buy.

        They’re simply more agile than other mfrs, for better (this situation) or worse (weekly price and option changes).

        Tesla has certainly experienced supply chain issues, but they have managed them better than most. However, they’re still prioritizing the high-dollar product configurations, and their prices have gone through the roof.

    • 0 avatar

      I doubt I could obtain such data but I’d love to see some chip *deliveries* in unit amounts for Tesla vs others.

    • 0 avatar

      Tesla makes everything in house including chips which are more powerful and more advanced than chips used by traditional automakers. They also use lesser amount of chips because their chips generation or more ahead or everybody else. Think of Tesla as of Apple. Apple makes own chips.

  • avatar

    “Toyota said this week it is unlikely to reach its goal of making 9 million cars this fiscal year”

    Setting a volume target just to set a volume target is stupid. Is Toyota stupid now? (That would make them Big and Stupid – not a good combination.)

  • avatar
    schmitt trigger

    “ They’re simply more agile than other mfrs,”

    Having worked for many years in the design and manufacturing of electronic modules for automotive applications, I can attest that legacy auto makers are as agile as fish out of the water.

    Even the most minute change requires an immense amount of paperwork and recertification.

    This is a direct cause of the requirements first outlined by the big-3 as QS-9000, whose approach is very much prevention driven (*).
    This prevents unauthorized changes, which if implemented without a thorough analysis and traceability, may have a detrimental future effect.

    I am not saying that this is wrong, quite the contrary, it is a fundamental cornerstone in the quality improvements that we have seen. Modern automobiles with their extreme complexity could not be built.

    But rules and regulations, no matter how benign their initial intent, take a perverse turn for the worst.
    The end result is that while these regulations have prevented many failures, they also prevent agility and in many instances, outright innovation.

    (*) I know that QS-9000 has been superseded by ISO/TS16949, which in my humble opinion, tightens the leash further.

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