Toyota factories in Japan hit by massive glitch

Toyota said Tuesday it halted operations at 12 of its 14 factories in Japan due to a system glitch, but that it did not appear to be a cyberattack.

The world's biggest automaker refrained from discussing other details of the incident, which began Tuesday morning. "Twelve vehicle factories, affecting 25 lines, are not able to process orders for parts due to a system glitch... At this point, we believe it is not a cyberattack," a Toyota spokesman told AFP. "We will continue to investigate the cause of the matter and will restore it as soon as possible."

It was not immediately clear exactly when normal production might resume. It did not say whether factories abroad were affected. The Toyota factory in the southern Kyushu region and subsidiary Daihatsu's factory in Kyoto remained operational, the spokeswoman said.

The news sent Toyota's stocks into the red, trading 0.64 percent lower at 2,421.0 yen. But the shock selling seemed to have slowed before the midday break in Tokyo markets.

Last year, Toyota had to suspend all of its domestic factories after a subsidiary was hit by a cyberattack.

The company is among the most important and respected companies in Japan, and its production activities have an outsized impact on the country's economy. Toyota is known for its storied efficiency and the "just-in-time" production system of providing only small deliveries of necessary parts and other items at various steps of the assembly process. This practice minimises costs while improving efficiency and is studied by other manufacturers and at business schools around the world, but also comes with risks.

The auto titan retained its global top-selling auto crown for the third year in a row in 2022, but like much of the industry has battled pandemic headwinds and the effects of a global chip shortage. Still, Toyota was aiming to earn an annual net profit of 2.58 trillion yen ($17.6 billion), up 5.2 percent on year, and sales of 38 trillion yen for the fiscal year to March 2024.

Major automakers are enjoying a robust surge of global demand after the Covid-19 pandemic slowed manufacturing activities. Severe shortages of semiconductors had limited production capacity for a host of products ranging from cars to smartphones. Toyota has said that chip supplies were improving and that it had raised product prices and worked with suppliers to bring production activities back to normal. However, the company was still experiencing delays in the deliveries of new vehicles to customers, it added.