Tokyo, Japan
Japanese automaker Toyota Motor had to repeatedly halt production at its Mexico plant in February and March due to shortages of local labour. This affected output at suppliers, Reuters reported citing people with knowledge of the automaker's operations. These stoppages cause a risk of potential choke point for the world's biggest automaker which plans to produce 10 million vehicles this year, as per documents from Toyota and suppliers reviewed by Reuters.
Production was halted for a total of 19 days in February and March at Toyota's plant in Tijuana, Mexico, where it makes the Tacoma pick-up truck, according to two sources. Another factor that resulted in the production stoppage at the plant is technical issue. However, now, Toyota is working with some suppliers to ease the strain. Still, some parts makers are barely managing to keep production going because of the worker shortage, one of the people told Reuters.
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In a pool of issues being dealt with by the Japanese automaker, the supply disruptions are the latest. The manufacturing giant is also been dealing with the fallout from a safety test certification scandal at subsidiary Daihatsu, as well as separate governance issues at two other group companies.
Due to these scandals, the automaker's plan to produce electric vehicles in the US has been delayed by six months to around June 2026. The EV delay was previously reported by Japanese media. "Toyota's North American plants continue to face intermittent production delays due to supply chain disruptions. To minimise the impact, our teams are working diligently to do everything possible to lessen the inconvenience to our customers," said Toyota Motor North America.
The automaker acknowledged the "frequent production halts" that were causing "inconvenience and concern" in a letter to its North American supplier network in late April. The automaker even requested details from parts makers about the challenges being faced by them in North America and what kind of support they required. "There were some operational issues involving parts makers, and it became clear in the fourth quarter that production was not going as expected," Yoichi Miyazaki, Toyota's chief financial officer said.
(with inputs from Reuters)