TOYOTA is reportedly accelerating plans to move more vehicle production outside Japan as escalating disruption linked to the Iran conflict and Strait of Hormuz shipping crisis begins to impact manufacturing, exports, and supplier networks across the industry.

 

Auto industry commentators say the scale of the disruption is becoming increasingly apparent.

 

According to reports from Nikkei Asia and Automotive News Europe, Toyota has informed suppliers it will reduce production by approximately 83,000 vehicles over the next six months, following an earlier cut of nearly 40,000 units during March and April.

 

The reductions primarily affect vehicles destined for the Middle East, where shipping routes through the Strait of Hormuz have been severely disrupted.

 

High-volume export models including the HiLux, Fortuner, LandCruiser FJ, RAV4, Corolla Touring, and Probox are among those models impacted.

 

Reuters data cited in the reports suggests Japanese vehicle exports to the Middle East collapsed by more than 90 per cent in April 2026, illustrating how severely logistics have deteriorated.

 

Toyota exports around 600,000 vehicles annually to the region, making the Middle East one of its most important global export destinations.

 

The company is now believed to be exploring greater utilisation of overseas production facilities – including spare capacity in the United Kingdom and elsewhere in Asia and Europe – to reduce dependence on vulnerable Japanese shipping lanes.

 

The disruption extends well beyond finished vehicles as major suppliers across Toyota’s industrial ecosystem are now warning of raw material shortages, logistics bottlenecks, and growing uncertainty around component supply.

 

Denso, Toyota’s key component supplier, says the situation is becoming increasingly difficult to forecast.

 

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

 

Suppliers are already reporting shortages of aluminium, resins, paint thinners, oil-derived naphtha, and chemical solvents.

 

Toyota Boshoku president Masayoshi Shirayanagi warned that many interior components rely heavily on oil-based materials.

 

“Whether it’s door trims or the urethane inside seats, everything is derived from resins, which in turn comes from oil-based naphtha,” he said.

 

Toyota has already warned investors the combined impact of global conflicts, rising fuel costs, and shipping disruption could slash earnings.

 

The company estimates the broader situation could cost approximately ¥670 billion (around $A6.0b) through higher transport costs, delayed deliveries, material price increases, and weaker Middle East demand.

 

Denso separately expects a ¥45 billion ($A395m) profit impact tied to uncertainty around raw material availability.

 

On the local front, Toyota Australia says supply remains stable at this stage.

 

“At this stage, we’re not seeing any impact to production for Australian-bound vehicles,” said a spokesperson.

 

The company added it expects strong supply through the remainder of the year, however, the broader implications remain significant.

 

Toyota had originally forecast combined Toyota and Lexus production of approximately 10 million vehicles globally for the current Japanese financial year.

 

The latest developments now place additional pressure on that target.

 

Auto industry commentators say the situation increasingly resembles the early stages of the COVID-era semiconductor crisis, where seemingly isolated supply disruptions cascaded rapidly across the automotive industry.

 

As exemplified in Toyota’s case, with modern vehicles requiring tens of thousands of individual components sourced globally, even small interruptions can quickly halt production.

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.