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Toyota production grinding to a halt

February 8, 2016

Toyota is facing a whole week without production in its home country. The world's largest carmaker had to suspend its output due to a shortage of a special steel variety, following an explosion at a factory.

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Toyota Logo
Image: picture-alliance/dpa

Toyota said Monday that assembly lines would stand still for the rest of the week at 29 of its plants, including 18 operated by other companies.

The move was necessitated after a recent explosion at a plant run by Toyota affiliate Aichi Steel, making it difficult for the carmaker to secure enough of a particular type of steel it uses for its auto parts.

Aichi Steel itself is not scheduled to resume production until March 29. In the meantime, Toyota said it would obtain steel from other manufacturers.

Toyota remains top-selling carmaker

Market reaction

The company normally produces between 13,000 to 14,000 vehicles a day in Japan. It's the first time the company has had to stop all production in the country since the 2011 earthquake and resulting tsunami disrupted its supply chain.

Toyota shares ended 1.06 percent lower on Monday. Market pundits said this was not primarily due to the carmaker's announcement it would have to halt production for a week, but rather a reaction to the company's release of nine-month results last Friday.

While the report showed a decent bottom-line profit for the automaker, it also pointed to falling vehicle sales, underscoring the current challenges in emerging markets.

hg/cjc (AFP, dpa)