The COVID-19 pandemic has led to production issues in various industries throughout the world. Especially in the early part of the pandemic, factories were shut down in America and other parts of the world.

While work ramped back up in the U.S. relatively quickly, production in other parts of the world has been more stop-and-go at times.

Toyota

is feeling the effects of that, as the automaker has recently suspended production of its vehicles in Thailand on a temporary basis due to virus outbreaks.

The shutdown will not only affect Toyota's car production, but also Thailand's economy. And the domino effect of the shutdown will also lead to lower inventory in America, affecting the industry here as well.

Toyota temporarily halts production in Thailand

Toyota production will be slowed down shortly

Reuters

has the story about Toyota stopping production in its Thai factories. Parts shortages led to the shutdown in three of Toyota's manufacturing plants in the country: Ban Pho Plant, Samrong, and Gateway.

The initial halt in production was scheduled for a week and a half, with an extension possible depending on the country's situation at the time.

In its statement announcing the pause in production, Toyota wrote that "the production operation for the next week will be determined at a later stage." Thailand is an important country for production of Toyota's vehicles.

According to the company's website, it has an annual production capacity of 550,000 vehicles in the Asian nation.

In the days leading up to the suspension announcement, Thailand had reported record numbers of coronavirus cases, with more than 13,000 the day of Toyota's announcement. Thailand tightened restrictions in an attempt to curb the COVID outbreaks in the country. More than 93% of Thailand's COVID cases and deaths have occurred since April.

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Car export is important to the Thai economy

MORE: Toyota Tops the List of Fastest-Selling Cars for June 2021

Losing vehicle production will hurt Toyota's bottom line because it will result in lower sales for the year, but Thailand's economy will also take a hit with fewer vehicles being made there.

Toyota isn't the only manufacturer that makes cars in Thailand;

Honda

is another big name with production lines there. In total, Thailand is the fourth-biggest hub in Asia for automobile assembly and export.

The auto industry accounts for about 10% of Thailand's GDP and manufacturing jobs. Exports of motor vehicles have been a bright spot for the country, as its tourism sector has been hit hard by pandemic-related travel restrictions.

Domestic car sales have also been on the rebound, up 15% in June.

Thailand's importance to the American auto industry

MORE: Toyota Had a Forgotten Sub-Brand Before Scion

The auto industry is important to Thailand's economy, but Thailand is also important to the industry in America. Americans often think of

Japan as a key element

in the American auto industry. In recent years, though, Thailand has grown into a bigger part of the industry.

With Thailand producing more cars—up to 850,000 completely built cars expected to be exported in 2021—more of the country's car production is ending up stateside.

The auto industry in America is still experiencing inventory shortages due to pandemic-related issues, so it’s important for manufacturers and dealers to get as many units as possible, and Thailand is a big part of that.

With fewer cars expected to be produced overall this year, full insurance coverage on your current car is as important as ever.

Jerry

can help you find cheap car insurance to fit all of your driving needs.

Toyota