Toyota to restart Japan production on Wednesday after system failure

By Satoshi Sugiyama

TOKYO (Reuters) -Toyota Motor will restart operations at its assembly plants in Japan on Wednesday, after a production system malfunction brought domestic output to a halt at the world's biggest-selling automaker.

Toyota will resume operations at 25 production lines of a dozen plants in its home market from Wednesday morning and add the final two plants from the afternoon, it said.

The company continues to investigate the cause of the glitch, which it said was not due to a cyberattack and prevented it from ordering components.

The plants together account for about a third of the automaker's global production, Reuters calculations showed.

Toyota's domestic production had been on the rebound after a series of output cuts it blamed on semiconductor shortages. Output was up 29% in January-June, the first such increase in two years.

​ Its Japan output averaged about 13,500 vehicles daily in the first half of the year, Reuters calculations showed. That excludes vehicles from group automakers Daihatsu and Hino.

Operations were halted for a day last year when a supplier suffered a cyberattack, hampering Toyota's ability to order parts. Toyota resumed operations using a back-up network.

Analysts said Toyota could be tested in making up for output lost during the outage, such as by running extra shifts.

"Output was running at full capacity so there's little additional room for production," said Seiji Sugiura, an analyst at Tokai Tokyo Research Institute.

Tuesday's incident also had a knock-on effect. Group firm Toyota Industries said it has partially suspended operations at two engine plants due to the automaker's glitch.

Toyota is a pioneer of just-in-time inventory management, which keeps down costs but means supply chain snarls put production at risk.

While the cause of the latest malfunction was unclear, corporate Japan has been on alert in recent days as businesses and government offices reported harassing phone calls.

The government said the calls were likely from China and related to Japan's release of treated radioactive water from the wrecked Fukushima nuclear power plant into the Pacific Ocean.

Toyota's share price closed down 0.21% at 2,431.5 yen after spending much of the morning deeper in negative territory.

(Reporting by Satoshi Sugiyama; Additional reporting by Miyoung Kim, Kevin Krolicki and Daniel Leussink; Editing by David Dolan, Christopher Cushing and Mark Potter)