COVID-19 affecting major parts suppliers of Toyota and Isuzu
The regional and local auto industries have had a lot of challenges of late. The pandemic, issues with parts supplies, and a hurting economy have formed a storm that is making things difficult.
Now there are some more issues that we can report on, and this concerns two major automakers in the region.
Our insiders in Thailand have informed us of a problem that will affect vehicle production for at least a week. The affected automakers are two of the biggest there: Toyota and Isuzu.
Given the news lately, we half expected it to be related to the global semiconductor shortage. That is not the case though as the issue is COVID-19, but it's not at the automakers' factories in Thailand. Rather, the spread of the virus is with parts suppliers of the two major companies.
We were able to read an internal Toyota document that mentions “parts supplier impact from COVID-19 situation”, and that they will be suspending production at four of Toyota Motor Thailand's factories for almost a week starting yesterday.
Toyota's two Gateway plants in Chachoengsao will not be operating for much of the week. This factory produces the Camry, Yaris ATIV, Yaris, Vios, Corolla Altis, Corolla Cross, and C-HR.
The story is the same for Toyota's Samrong plant. This one manufactures the Hilux and the Fortuner. The Toyota Ban Pho plant will also experience a stoppage. This is the second factory that manufactures the Hilux as well. Yes, Toyota has two factories that make the Hilux given their local demand and export to other markets.
There was no document about Isuzu's production suspension, but given that automakers often have the same suppliers, we expect the impact to be similar because of JIT or just-in-time.
Many automakers worldwide have adopted a manufacturing philosophy to the one pioneered by Toyota: just-in-time (JIT). This style of manufacturing is optimal given its efficiency as parts are installed into the vehicle almost as soon they arrive. JIT prevents the added costs and storage requirements of stockpiling parts that aren't going to be used just yet. It is, however, dependent on parts arriving on time, all the time.
We can expect this delay to eventually affect the Philippines in the next few months. The stoppage of production means an interruption in the supply of CBU imports from Thailand for many popular models. Toyota sources the Corolla Altis, Corolla Cross, Yaris, Camry, and Hilux from Thailand, while Isuzu gets the D-Max and the mu-X from there as well. If you're in the market for a Fortuner, well that's made in Indonesia so there shouldn't be a delay... beyond the usual, of course.