It's a rough patch for Toyota Motor Corp (TM). The automaker is dealing with two major operational headaches at once: a massive safety recall in the United States and a significant production cut for a key export market, all of which is showing up in the stock price.

Let's start with the recall, because it's a big one. Toyota is calling back 550,007 vehicles in the U.S. after regulators found a defect that could prevent the second-row seat backs from locking properly. The National Highway Traffic Safety Administration (NHTSA) says this increases the risk of injury during a crash. The recall covers certain 2021–2024 Toyota Highlander and Highlander Hybrid models.

The problem is with the return springs in the seat-back recliner assemblies. They might not engage correctly when the seat is adjusted, which means the seat could fail to properly restrain someone if there's a collision. It's the kind of mechanical glitch that sounds minor but has serious safety implications.

The fix is straightforward, at least. Toyota dealers will replace those faulty return springs at no cost to owners. The company expects to start mailing notification letters to affected vehicle owners around April 20, 2026. If you own one of these Highlanders and want more info sooner, you can contact Toyota customer service and reference recall numbers 26TB06 and 26TA06.

While that's happening in America, Toyota is facing a completely different kind of problem on the other side of the world. The company plans to cut production of vehicles destined for the Middle East by nearly 40,000 units across March and April. The reason? Logistical disruptions linked to the U.S.-led war with Iran and the closure of the Strait of Hormuz.

This isn't a small trim. The reduction will be about 20,000 units in March and another 18,000 in April. According to reports, that's equivalent to roughly 60%–70% of Toyota's typical monthly exports to the region. The cuts will primarily affect Japan-built models, including the iconic Land Cruiser, other SUVs, sedans, and commercial vans.

So, you have a classic one-two punch: a costly quality control issue requiring a fix for over half a million cars, and a geopolitical supply chain snarl forcing a major pullback in production for a lucrative market. It's the kind of news that tends to make investors nervous.

And indeed, Toyota Motor shares were down 2.30% at $211.60 at the time of publication on Friday. When a company announces it needs to fix a safety problem in hundreds of thousands of vehicles and simultaneously can't ship tens of thousands of new ones, the market tends to take notice.