System failure forces Toyota to halt operations at all Japan assembly plants

Toyota Motor Corporation has halted operations across all of its assembly plants in Japan starting Tuesday afternoon due to a malfunction in its production system. This issue is expected to bring the world's leading automaker's domestic production to a halt. While a spokesperson for Toyota stated that the cause of the problem is being investigated, they also noted that it is unlikely to be the result of a cyberattack. The malfunction has impacted the company's ability to place orders for necessary components.

Initially, Toyota suspended operations at 12 of its plants on Tuesday morning, leaving two plants operational. However, all 14 plants will be brought to a halt during the second shift on Tuesday. The exact extent of the production loss remains uncertain. These 14 plants together contribute to around one-third of Toyota's global production, based on calculations by Reuters. Toyota holds the position of the world's largest automaker in terms of sales.

Semiconductor challenges 

This suspension comes as a setback for Toyota, which had been experiencing a recovery in its Japanese production following several instances of reduced output due to semiconductor shortages. In the first half of the year, Japanese production surged by 29 per cent, marking the first such increase in two years. On average, daily production in Japan for Toyota brands (excluding Daihatsu and Hino) amounted to approximately 13,500 vehicles during this period.

Toyota faced a shutdown of its operations last year due to a cyberattack on one of its suppliers. This incident, which lasted a day, led to a loss of approximately 13,000 cars in terms of output.

Manufacturing processes

Toyota's manufacturing processes are closely tied to just-in-time inventory management, a system that focuses on minimising costs but also leaves production vulnerable to disruptions in the supply chain.

Although the precise cause of the malfunction remains uncertain, Japanese businesses and government offices have reported receiving a significant number of harassing phone calls recently. These calls are believed to be originating from China and are thought to be connected to Japan's discharge of treated radioactive water from the Fukushima nuclear power plant into the Pacific.

(With Reuters Inputs)