Toyota Considers Idling Japan Production Due To Steel Shortage

Toyota Motor Co., said Saturday that it may halt production in its Japanese car-making factories in February due to shortage of steel parts, following a blast at one of its steel plants earlier this month. Toyota, world’s largest car maker, makes about 40 percent of its global output in Japan.

Aichi Steel, an affiliate of Toyota, had reportedly said that an explosion on Jan. 8 at its Chita plant in central Japan affected the production of special steel parts. The Japanese steel manufacturer also said that it aimed to resume operations in March.

"At the moment, there is enough supply inventory to keep our domestic plants running until Feb. 6," a Toyota spokesman told Reuters, adding that overtime and weekend shifts for next week had been canceled.

"After that, we will be monitoring our supply situation on a day-by-day basis and decide accordingly," the spokesman said.

However, the company reportedly refused to comment on which steel-made components were produced at the affected plant. The shortage could affect the company’s plans to produce 4.13 million vehicles in Japan this year.

Toyota, which makes about 14,000 cars in Japan daily, posted worldwide sales of 10.15 million in 2015, keeping its title as the world's largest-selling carmaker. The company took complete control of its Daihatsu unit in a $3 billion deal Friday in to expand its market share in the sub-660 cc engined minicars, popular in Japan, Indonesia and Malaysia.

The company has focused on developing closer ties with Japanese peers like Mazda Motors Corp. as automakers face rising costs of meeting tougher environmental standards amid slowing global car sales.

Meanwhile in Europe, Volkswagen halted production at two of its German factories that build Passats, and at its main gearbox plant Saturday as the world’s second largest car maker grapples with reduced demand and technical problems.

Production was also suspended at Volkswagen's Emden factory in northwest Germany and its factory in Kassel Friday due to technical problems at the stamping plant, local media reported.