Toyota Confronting Widespread Factory Stalls in Asia

Matt Posky
by Matt Posky
toyota confronting widespread factory stalls in asia

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]

Join the conversation
2 of 7 comments
  • ToolGuy ToolGuy on Jan 20, 2022

    "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.)

  • Schmitt trigger Schmitt trigger on Jan 21, 2022

    “ 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.

  • Bd2 Other way around.Giorgetto Giugiaro penned the Pony Coupe during the early 1970s and later used its wedge shape as the basis for the M1 and then the DMC-12.The 3G Supra was just one of many Japanese coupes to adopt the wedge shape (actually was one of the later ones).The Mitsubishi Starion, Nissan 300ZX, etc.
  • Tassos I also want one of the idiots who support the ban to explain to me how it will work.Suppose sometime (2035 or later) you cannot buy a new ICE vehicle in the UK.Q1: Will this lead to a ICE fleet resembling that of CUBA, with 100 year old '56 Chevys eventually? (in that case, just calculate the horrible extra pollution due to keeping 100 year old cars on the road)Q2: Will people be able to buy PARTS for their old cars FOREVER?Q3: Will people be allowed to jump across the Channel and buy a nice ICE in France, Germany (who makes the best cars anyway), or any place else that still sells them, and then use it in the UK?
  • Tassos Bans are ridiculous and undemocratic and smell of Middle Ages and the Inquisition. Even 2035 is hardly any better than 2030.The ALMIGHTY CONSUMER should decide, not... CARB, preferably WITHOUT the Government messing with the playing field.And if the usual clueless idiots read this and offer the tired "But Government subsidizes the oil industry too", will they EVER learn that those MINISCULE (compared to the TRILLIONS of $ size of this industry) subsidies were designed to help the SMALL Oil producers defend themselves against the "Big Oil" multinationals. Ask ANY major Oil co CEO and he will gladly tell you that you can take those tiny subsidies and shove them.
  • Dusterdude The suppliers can ask for concessions, but I wouldn’t hold my breath . With the UAW they are ultimately bound to negotiate with them. However, with suppliers , they could always find another supplier ( which in some cases would be difficult, but not impossible)
  • AMcA Phoenix. Awful. The roads are huge and wide, with dedicated lanes for turning, always. Requires no attention to what you're doing. The roads are idiot proofed, so all the idiots drive - they have no choice, because everything is so spread out.