Toy­ota to stop Ja­pan pro­duc­tion for a week

The Pak Banker - - COMPANIES/BOSS -

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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