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Automobiles

Toyota and Honda shut Malaysia plants as lockdown blocks commute

Automakers removed at last minute from 'essential industries'

A Honda showroom in Malaysia's Johor Bahru: The automaker suspended production at two factories in the country.   © Reuters

BANGKOK -- Toyota Motor and Honda Motor have halted operations at multiple plants in Malaysia, Nikkei has learned, due to the strict lockdown imposed by the government to combat a surge in coronavirus infections.

Toyota shut down two assembly plants on Thursday. When asked when the facilities will reopen, a representative said that "a decision will be made later on."

Honda suspended production at two factories Wednesday. One plant makes two-wheelers while the other produces four-wheel vehicles. The Japanese automaker plans to freeze operations until Jan. 26, when the lockdown is due to be lifted.

In 2019, Toyota manufactured approximately 61,000 vehicles in Malaysia, including the Yaris subcompact and the Hilux pickup truck. Honda's annual capacity in the market is 300,000 two-wheelers and 100,000 four-wheelers, such as the Civic and Accord sedans.

Perodua, the national automaker backed by Japanese car company Daihatsu Motor, also discontinued production on Thursday. Perodua sold 220,000 vehicles last year, holding the top market share exceeding 40%.

Malaysia enacted another lockdown order on Wednesday forbidding interstate travel anywhere in the country. For eight regions including the capital, Kuala Lumpur, people outside of essential industries are banned from commuting to work.

Auto assembly was initially included in the list of essential industries, until officials pulled the exemption at the last minute Tuesday evening. Auto production was suspended as well during the lockdown implemented in March 2020.

Malaysia is the third largest auto producer in Southeast Asia, behind Thailand and Indonesia. Output during the January-November period of last year fell 19% to roughly 430,000 vehicles.

But automakers had been on the road to recovery thanks to tax breaks offered by the government to stimulate the economy. The measure targeted passenger vehicle sales. As a result, auto production generally exceeded year-earlier numbers beginning in June.

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