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.

Xiaomi’s upcoming YU7 GT has just become the world’s fastest production SUV around the Nürburgring Nordschleife, with a lap time of 7:34.931. The record was achieved with Xiaomi chief test driver Ren Zhoucan behind the wheel.

Previously, the record for the fastest production SUV was held by the Audi RS Q8 Performance with a lap time of 7:36.698. The second-best time prior to the YU7 GT taking the crown was achieved by the Porsche Cayenne Turbo GT – 7:38.925.

Xiaomi founder and CEO Lei Jun praised the YU7 GT’s achievement, stressing how the higher center of gravity in SUVs makes posting an ideal time on the famous circuit highly difficult.

Xiaomi will fully unveil the YU7 GT on May 21, but the company has already revealed that it has a dual-motor system delivering 738kW or 990hp. It has carbon-ceramic brake discs and was jointly developed by Chinese and European experts. It has a top speed of 186 mph and a range of up to 438 miles under the optimistic CLTC testing conditions.

The YU7 GT is expected to start at around CNY 400,000 (approximately £42,800 at the current exchange rates). The ‘vanilla’, non-GT YU7 model launched last June starting at CNY 253,500 (£27,100).

Xiaomi has already deployed YU7 GT display vehicles to 268 stores in 82 Chinese cities, and it’s recently introduced the striking Crimson Red colorway.

Kia unveiled the EV2 back in early January, and today the brand has announced that production of the model has officially started. It’s being manufactured at Kia’s facility in Žilina, Slovakia, following a modernization program on its production lines, which was completed in 2025 at a cost of $234 million.

The Slovakian plant employs around 3,700 people and more than 600 robots across five main production areas: press, body, paint, engine, and assembly. The facility produced 300,000 vehicles and 470,000 engines in 2025, or about 9.3% of Kia’s global output.

The EV2 is Kia’s second fully electric model made in Europe after the EV4. The EV2 comes with two battery options (42.2kWh and 61kWh), with ranges up to 197 miles and 281 miles, respectively. 11kW AC charging is supported, as is DC fast charging with Plug & Charge functionality.

Practically no modern EV launch has gone off without a hitch. Whether you’re a startup like Fisker or part of the establishment like Volvo, the last several years have proven it’s fair to expect pain when ramping up production of a new electric model. Software, supply chains, battery issues, quality—they can all create speed bumps or, worse yet, full-on disasters. 

Rivian is banking its entire future on the R2 rollout being smooth and successful. That starts with 20,000 to 25,000 units shipped in 2026, as we reported last month. TechCrunch puts that target into context in a great analysis out Thursday. You should go read it for the full picture. 

But here’s one takeaway: By aiming to sell 20,000 R2s within six months, the outlet says Rivian plans “one of the fastest EV launches in U.S. history.” Only the Tesla Model Y hit that milestone in less time, TechCrunch found. Some took much longer than that. The Chevy Blazer EV, dogged by software issues and a pause in sales, didn’t hit 20,000 cumulative sales until over a year after it launched. 

The R2 is Rivian’s best chance yet to hit real scale and turn a profit—to have a “Model Y moment,” if you will. But the U.S. EV market could not be more different than when Tesla’s best seller landed. At the same time, the Model Y’s success proves that there’s a big market for EVs that get things right. 

Many factors will determine how quickly Rivian can ramp things up, but a couple are on my mind. There’s the manufacturing issue, of course. The startup says it’s much better prepared for this launch than it was for the R1S or R1T. 

Another question is pricing. What Rivian has going for it is a loyal fanbase that’s clamoring to buy an R2. But what will it cost when production starts, and will that meet the market? We’ll know more when the company reveals more about the R2 lineup on March 12. 

Contact the author: Tim.Levin@InsideEVs.com 

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