Toyota Motor Corp. said it will suspend production at all assembly plants in Japan next week in the wake of a steel factory explosion, interrupting the supply of crucial models including the new Prius hybrid.
All domestic assembly lines will halt Feb. 8 through Feb. 13, Toyota said Monday 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 lost output underscores the fragility of the automaker’s supply chain, which was disrupted by Japan’s 2011 earthquake and tsunami, even as it leads the industry in sales.
“It’s always challenging to deal with something like this because maintaining a lean production system is Toyota’s goal,” said Koji Endo, an analyst at Advanced Research Japan. For the Prius and some SUV models exported to the U.S., “supply and demand is relatively tight, so if they have to reduce output, that’s going to be a problem.”
Aichi Steel said last month 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 March.
Japan’s steelmakers agreed to cooperate with one another in the event of production disruptions after the 2011 earthquake and tsunami, Yumi Harada, an Aichi Steel spokeswoman, said by phone. Representatives for both Aichi Steel and Toyota declined to name other steelmakers that may be able to help alleviate the automaker’s steel shortage.
Toyota had suspended some parts exports and stopped overtime work at Japan plants due to the Aichi Steel explosion. The carmaker’s Japan assembly plants are scheduled to restart on Feb. 15, and operations outside Japan won’t 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 cars per day, President Akio Toyoda told reporters in December.
Toyota’s shares rose 1.4 percent to 7,303 yen as of 10:52 a.m. in Tokyo trading, while the benchmark Topix Index gained 1.7 percent.