Toyota to stop Japan production for a week

Toyota Motor Corp. said on Monday it would halt production at all car assembly plants in Japan from 8 February to 13 February due to a steel shortage following an explosion at a steel plant of one of its affiliates.

The world's biggest automaker said on Saturday a blast at an Aichi Steel Corp plant on 8 January had curbed production of steel used in auto parts including engines, transmissions and chassis. It gave no specifics on how car production would be affected.

"Operations are scheduled to recommence on 15 February, and vehicle production on lines outside Japan will not be suspended," Toyota said in a statement. Toyota said it was looking at options including asking Aichi Steel to produce parts on alternate lines and procur- ing specialised other makers.

Late last week, it said it had enough inventory to keep the factories running until 6 Februay. Toyota shares rose 1.8% on Monday, tracking broad market gains, as investors brushed off the announcement. Toyota produced 4.0 million vehicles in Japan in 2015, roughly 46% of which was exported.

It produced around 13,600 vehicles a day in December, up 10% from a year earlier, due in part to the start of production of the latest Prius petrol hybrid. The stoppage illustrates the risks of Toyota's "just-in-time" inventory system, under which the company receives parts several times a day according to requirements, avoiding the need for excessive inventories. A plant fire at an affiliate supplier brought domestic production to a halt in 1997.

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