After a single worker tested covid positive, the Toyota plant in Vietnam suspended its production, shaking the profits of the world’s biggest carmaker.
The plant is operated by a key Toyota supplier and is one of Vietnam’s biggest assemblers of wire harnesses that hold the inner workings of an automobile.
The delta variant was spreading swiftly throughout the Southeast Asian region since the first week of August.
The intimidation of the covid outbreak worsening in the region had forced the Japanese automaker to examine its suppliers since July.
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The world’s biggest automaker has shocked the market by slashing its output of cars in September by 40% compared to previous production plans since it is unable to secure a number of parts including the wire harnesses.
Japanese automakers have invested heavily in Southeast Asia over the past decade, looking to the region as a source of cheap labor.
After the covid shock emerging from the Vietnam plant, Toyota is facing the challenge of securing substitute parts and recovering lost output in time to meet an inventory-depleting level of global demand for cars.
Moreover, Thailand is also a major production hub for Toyota, Mitsubishi Motors, Honda, and Nissan Motor.
These automakers make up about half of Thailand’s vehicle production capacity and source several parts from neighboring countries.
For now, automotive suppliers in the nations are showing signs of getting on a path to recovery and Toyota said it expects to begin to recover the losses in October.