As Toyota plans to almost halve production at Japanese factories, a local governor stated on Thursday he would offer 400 billion yen ($3.72 billion) in emergency loans for small and mid-size firms including Toyota’s suppliers.
Toyota Motor’s headquarters are in Aichi Prefecture, at Toyota City, which was named following the company in the 1950s to show its role as the biggest employer in the location.
“(Toyota is) not only the backbone of Aichi prefecture’s economy but all of Japan,” Aichi governor Hideaki Ohmura informed Reuters, adding that it kept valuable manufacturing jobs in Japan while other firms exported their plants abroad.
Japan is a major production center for Toyota and its regional manufacturing network is heavily concentrated in Aichi, Japan’s industrial heartland where over 40% of the cars constructed in Japan are made.
Toyota and its affiliates operate over half of Aichi’s plants.
Ohmura stated Toyota and its top tier suppliers supported over 55,000 jobs in the region and thousands more through smaller providers.
“We need to be able to support the demand when there’s a rebound and to do that we need to properly support the auto companies’ small and medium suppliers,” he stated.
He stated his proposal for the 400 billion yen in loans would be part of a package of measures the prefectural assembly was due to adopt on Friday.
Toyota has stated it expects to produce 40% fewer vehicles than initially planned in May after it started to significantly decrease output at its Japanese plants this month, because of declining demand for export models consisting of those shipped to the United States and the Middle East because of the coronavirus.
Toyota has stated it will stop production on a staggered basis through mid-May at five of its regional plants which produce high-volume models consisting of the Prius gasoline hybrid, the Corolla hatchback and the Camry sedan.
For years, Toyota has vowed to maintain an yearly domestic production level of 3 million vehicles, roughly one-third of its worldwide output, in Japan to support jobs and hone manufacturing skills.
Over 11,500 people have tested positive for the coronavirus in Japan and almost 300 have died. Aichi has had 443 confirmed cases.
Manufacturing plants in Japan have been allowed to keep operating during the outbreak, and the powerful auto lobby has stated it would try to prevent suspending output while prioritizing worker safety.
Automakers and their suppliers are also thinking about industry-led financial support for struggling firms.
About 13,050 people in Japan have been confirmed as being infected with the coronavirus. The virus has killed 348 people in the country.
