US-Iran conflict forces Toyota supplier shortages

SUPPLY chain disruptions stemming from the US-Iran conflict are beginning to create chokepoints across Japan’s automotive industry, reports Automotive News Europe.

Included in the disruptions are “the network of companies surrounding Toyota”, including key supplier Denso, which produces a range of powertrain, electrical and climate control components, sensors, alternators, and fuel supply parts for a wide range of Toyota vehicles.

“We are hearing from smaller suppliers that suddenly say they won’t be able to deliver parts in two weeks’ time, which makes things very hard to predict,” said Toyota Industries president Koichi Ito.

While Mr Ito did not identify those components that might suddenly become unavailable, parts manufacturers have issued cautious forecasts for the current financial year as they grapple with rising raw material costs; shortages of aluminium, resins, and other crucial elements; and ongoing logistical hurdles.

In an industry where tens of thousands of components are needed to build a single vehicle, the flow-on effect could become as significant as that of the COVID-19 microprocessor shortage.

Automotive News Europe reports that raw-material disruptions are likely to impact parts production facilities from as early as June, with the industry already expressing concerns over a shortage of paint thinners, a product which without a vehicle cannot be finished.

The supply of resins and other raw materials are likewise beginning to slow, with car-interior manufacturer Toyota Boshoku already noting critical naphtha shortages.

“Whether it’s door trims or the urethane inside seats, everything is derived from resins, which in turn comes from oil-based naphtha,” explained Toyota Boshoku president Masayoshi Shirayanagi.

Mr Shirayanagi said his company is seeking short-term assurances from each supplier individually as it works to secure its supply commitments to Toyota Motor Company.

While naphtha-related shortages are yet to impact Denso production lines, executive vice president Yasushi Matsui said the company was expecting a related ¥45 billion ($A3.9m) profit hit from the uncertainty of future supplies.

“To be honest, we can’t see several months ahead,” he said, noting that the company is working to shift to alternative materials such as organic solvents.