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Toyota Work Stoppages In Japan Unlikely To Affect U.S. Inventory

An explosion in a steel mill has forced Toyota to limit production in Japan. Here’s why it won’t make much difference to the American market.

The motor press always like a negative story. An explosion limiting Toyota’s production and forcing the closure of some of its Japanese plants for about a week sure sounds like the basis for such a story, but we don’t think it so. Here in the U.S. market, Toyota builds all of its top models in North America, and many of them in the U.S. The Camry for example that you see on your dealership lot is not made in Japan. This is not news to those that know the brand well. Even Lexus now builds it top model here in the U.S. for its U.S. customers.

That said, Toyota still does make some specialty models, and one very important one, here in the U.S. Most of the company’s hybrid models are produced in Japanese factories. The Prius is a very high volume vehicle for Toyota, typically accounting for about 14,000 units total per month in the U.S. market. December was strong for the Prius as Toyota offered deals on old 2015 models to make way for the new-generation, 2016 Prius models. Given gas prices that are ridiculously low, the time for a shortage of Prius production could not be better for Toyota.

Toyota may have some tight inventory on small-volume models here in America, but any impact from the work stoppage is most likely going to affect its home market.

Image shows a U.S. worker at Toyota's Alabama engine plant