NAGOYA – As Toyota prepares to nearly halve production at Japanese factories, a regional governor said Thursday he would offer ¥400 billion ($3.72 billion) in emergency loans for small and midsize companies including Toyota's suppliers.
Toyota Motor Corp.'s headquarters are in Aichi Prefecture, in the city of Toyota, which was named after the company in the 1950s to reflect its role as the biggest employer in the region.
"(Toyota is) not only the backbone of Aichi Prefecture's economy but all of Japan," Aichi Gov. Hideaki Omura said, adding that it kept valuable manufacturing jobs in Japan while other companies exported their factories abroad.
Japan is a major production hub for Toyota and its domestic manufacturing network is heavily concentrated in Aichi, the country's industrial heartland where more than 40 percent of the cars built in Japan are made.
Toyota and its affiliates operate more than half of Aichi's plants.
Omura said Toyota and its top tier suppliers supported more than 55,000 jobs in the region and thousands more through smaller suppliers.
"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 said.
He said his proposal for the ¥400 billion in loans would be part of a package of measures the prefectural assembly was due to adopt on Friday.
Toyota has said it expects to produce 40 percent fewer cars than initially planned in May after it began to significantly reduce output at its Japanese plants this month, due to plummeting demand for export models including those shipped to the United States and the Middle East due to the coronavirus.
Toyota has said it will stop production on a staggered basis through mid-May at five of its domestic plants which produce high-volume models including the Prius gasoline hybrid, the Corolla hatchback and the Camry sedan.
For years, Toyota has pledged to maintain an annual domestic production level of 3 million vehicles, roughly one-third of its global output, in Japan to support jobs and hone manufacturing skills.
More than 12,000 people have tested positive for the novel coronavirus in Japan and nearly 300 have died. Aichi has had 443 confirmed cases.
Manufacturing plants in Japan have been permitted to keep operating during the outbreak, and the powerful auto lobby has said it would try to avoid suspending output while prioritizing worker safety.
Automakers and their suppliers are also considering industry-led financial support for struggling firms.
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