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.
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
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.
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.
Car export is important to the Thai economy
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.
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
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.