Toyota Mexico Plant Halts Production, EV Plans Impacted

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Toyota Mexico Plant Halts Production, EV Plans Impacted

Toyota's Mexico Plant Faces Production Stoppages Due to Labor Shortages

Toyota Motor Corp. was forced to halt production at its Mexico plant multiple times in February and March due to labor shortages at its suppliers, according to sources familiar with the automaker's operations.

These stoppages highlight a potential bottleneck for Toyota, which aims to produce 10 million vehicles this year. The company halted production for a total of 19 days at its Tijuana plant, which manufactures the Tacoma pick-up truck. Technical issues at the plant also contributed to the stoppage.

Toyota is working with some suppliers to alleviate the strain, but some parts makers are struggling to maintain production due to the worker shortage. This adds to the challenges faced by the Japanese manufacturer, which is also dealing with the fallout from a safety test certification scandal at subsidiary Daihatsu and governance issues at other group companies.

These issues have prompted Toyota to delay the start of electric vehicle production in the United States by six months to around June 2026. The company's North American plants continue to face intermittent production delays due to supply chain disruptions.

Toyota has acknowledged the "frequent production halts" in a letter to its North American supplier network, citing declining skills and reduced production capacity due to personnel, equipment, and material supply issues. The automaker has requested details from parts makers on their challenges and required support.

The labor shortages are impacting Toyota's production in the United States, even as demand for vehicles, particularly hybrids, increases. Toyota is expected to start selling a hybrid version of the Tacoma in the United States this year.

Robust economic growth and rising wages in North America have led to higher employee turnover as workers seek better conditions. This has made it difficult for suppliers to secure personnel and maintain production volume.

Toyota sold more than 230,000 Tacomas in the United States last year, representing about 10% of its total sales in that market. Only the RAV4 and Camry were bigger sellers.