Toyota Idles Japan Plants as Supplier Hit by Cyberattack

(Bloomberg) -- Toyota Motor Corp.'s Japanese factories suspended output on Tuesday after a key parts supplier shut down its computer systems due to a cyberattack, the latest blow to the carmaker's efforts to make up for lost production earlier this year.

The world's top auto producer is halting operations at all 14 plants in its home country, impacting about 5% of output for the month. The stoppage is linked to Kojima Press Industry Co., which confirmed Tuesday its server was subject to a suspected ransomware attack over the weekend. Toyota shares rose less than 1% in Tuesday morning trading.

The manufacturer of metal, plastic, and electronic components shut down its server Sunday after discovering it was infected with a virus and receiving threatening messages, the supplier said in a statement. The closely held parts maker is in contact with relevant police and government authorities and is trying to restore its system from March 2, a spokesperson for the company said late Monday.

The incident hinders Toyota's efforts to return to full production following factory halts in January and February because of chip shortages and Covid-related disruptions. Toyota, which had been relatively resilient to supply chain snags through most of the pandemic, has been trying to ramp up production to make up for lost output and meet soaring global demand for new vehicles.

“It's hard to believe the timing of this for Toyota,” said Bloomberg Intelligence analyst Tatsuo Yoshida. “The auto industry has been focused completely on parts shortages, but this is a reminder that cyberattacks are a serious risk that must constantly be monitored.”

Russia Link?

Japanese Prime Minister Fumio Kishida said the government would investigate the incident and whether Russia was involved in the cyberattack.

“Regarding any connection with Russia, it is hard to answer until we have conducted thorough checks,” Kishida told reporters late Monday, according to a transcript of his remarks on his website. Industry Minister Koichi Hagiuda said Tuesday Japan's government is currently gathering information on the cyberattack on Kojima Press.

Japan has joined other western nations in banning certain Russian banks from the SWIFT payments messaging system and promised to restrict transactions with Russia's central bank, potentially preventing Vladimir Putin's government from accessing billions of dollars worth of reserves.

Read more: Japan Seeks to Show Unity With G-7 on New Russia Sanctions

Cyberattacks have risen in Japan in recent years. Authorities identified 12,275 cyber-crime cases in the country last year, a record high, according to Japan's National Police Agency. Japan's manufacturing industry is the largest target for crimes such as ransomware attacks.

In 2020, Mitsubishi Electric Corp. was the victim of a cyberattack that resulted in the loss of client information. Sony Group Corp.'s email system and PlayStation networks were hacked in 2014 during the release of a comedy about a fictional assassination of North Korean leader Kim Jong Un.

The system outage is also affecting Toyota's affiliates. Hino Motors Ltd. is suspending all of its Japan plants, the bus and truck maker said late Monday. Daihatsu Motor Co. is suspending its Kyoto factory, according to the Nikkei, which was first to report Toyota's shutdown.

Toyota said earlier this month it was planning to produce 950,000 vehicles in March, up from 843,393 a year earlier. A one-day stoppage for Toyota's factories in Japan translates to roughly 13,000 vehicles, according to Shiori Hashimoto, a spokeswoman. The company operates 28 assembly lines in Japan.

Toyota's production fell 15% in January as the company halted output in the Chinese city of Tianjin when the government carried out multiple rounds of mass-testing on residents. In February, some of Toyota's North American operations were affected by protests that shut some of the main trade routes between the U.S. and Canada.

Read more: Toyota Production Dips in January on Chip, Covid Disruptions

The disruptions in the first month of the year prompted Toyota to cut its output goal for the fiscal year through March to 8.5 million vehicles from a previous target of 9 million. The company is investigating whether it can resume operations from Wednesday, Hashimoto said.