Please ensure Javascript is enabled for purposes of website accessibility

Toyota Idles Japanese Plants Due to Drop in Demand

By Howard Smith - Mar 24, 2020 at 1:10PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The carmaker is reacting to the economic fallout from the pandemic by scaling back operations.

Toyota Motor Corporation (TM -0.92%) has announced it is temporarily halting operations at five of its Japanese facilities beginning April 3, 2020. The shutdown is due to slumping demand as the world's economies struggle amid the fight to slow the coronavirus pandemic.

The company's Europe group had previously said that it was suspending operations in France, UK, Poland, Turkey, and the Czech Republic. Those shutdowns were in an effort to protect workers and help stem the spread of the virus. Though the company also acknowledged the short-term uncertainty of demand, as well as logistics and supply chain complications in its decision. 

Supply and demand shown as pieces in a puzzle

Image source: Getty Images.

Economic impacts

In total, the automaker will be idling Japanese production on seven different assembly lines at five factories. The suspension of operations is meant to bring supply more in balance, as the company sees a "decline in demand overseas." All of the operation downtime will begin on April 3 and last between two and nine days, depending on location.

Approximately 36,000 vehicles will be cut from supply due to the shutdown, reducing exports of the Prius, 4Runner, and several Lexus models, according to a report from Automotive News Europe.    

Toyota has not said what specific export markets it was targeting to reduce supply. However, it did note that other than the five plants in the announcement, production would continue normally elsewhere. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Toyota Motor Corporation Stock Quote
Toyota Motor Corporation
$155.67 (-0.92%) $-1.44

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.