Toyota Production Japan May Stop Next Month Due to Steel Shortage

Toyota may have to halt production of its vehicles in Japan due to a shortage in steel.

The shortage is the result of an explosion at the Aichi Steel plant, one of Toyota’s affiliates. The blast has curbed production of steel parts, possibly affecting output of the world’s largest automaker, which produces about 40 percent of its global output in Japan. According to a spokesman, the Japanese automaker has enough supply inventory to keep its domestic plants running until February 6.

Following that date, Toyota will monitor its supply on a day-to-day basis and decide accordingly. The Aichi Steel plant explosion happened on January 8 at its Chita plant in central Japan, hurting production of special steel parts. The plant is aiming to resume operations in March.

Last year, the automaker’s plants in Japan produced four-million vehicles, with roughly 46 percent being exported. Halting production could hurt Toyota’s plans to produce 4.13-million vehicles in the country this year, including the all-new Prius that is produced solely in Japan. Worldwide, the company plans to build 10.2-million vehicles in 2016 after posting worldwide sales of 10.15 million last year, giving it the title of world’s largest automaker for the fourth consecutive year.

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