Six Toyota production lines halted by supply chain disruptions; Japanese auto certification investigation may depress aluminium market

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At the beginning of June 2024, Japanese transport ministry officials initiated an on-site investigation at Toyota Motor's headquarters after discovering irregularities in the company's certification applications for certain vehicle models.

Six Toyota production lines halted by supply chain disruptions

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The fallout from the certification test scandal, which originated at Toyota's Daihatsu compact car unit, has broadened to impact other Japanese automakers. This follows the ministry's mandate for industry-wide reviews of certification practices.

Toyota, Mazda, Honda, Suzuki, and Yamaha Motor have all admitted to submitting flawed or manipulated data in their vehicle certification applications, as reported by Reuters. According to a ministry official, Toyota, Japan's largest automaker, was the first to undergo a ministry inspection, with the other four automakers scheduled for subsequent inspections.

On June 20, 2024, Toyota Motor announced it would suspend operations on six production lines at five of its plants in Japan due to a parts shortage. According to a spokesperson, the automaker plans to determine on June 21 whether production can resume.

The demand for aluminium in Japan's automotive sector may decline following Toyota's suspension of production, sales, and shipments of three models due to a certification investigation. Similarly, Mazda has reportedly halted the shipment of two models that are currently in production.

The automotive industry is Japan's largest consumer of aluminium, using 1,653,800 tonnes, or 43.8 per cent, of the nation's total aluminium demand of 3,771,300 tonnes in 2023, as the Japan Aluminium Association reported.

Toyota's latest results indicate that 999,088 units were produced in Japan from January to April 2024, a decrease of 83,773 vehicles or 7.7 per cent from the 1,082,861 units produced in 2023.

James Hong, the Head of mobility research at Macquarie, said, "When it comes to actual sales in (the) Japan market, the damage will be manageable or quite small because consumers basically have no alternatives in Japan."

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