Carmakers brace for supply woes
Japanese carmakers fear their business outlook is at risk from the new coronavirus as it threatens to cripple their supply chains in China.
“It’s impossible to manufacture cars without China,” says Toshiaki Okada, chief financial officer at Subaru Corp.
Subaru does not have production bases in China but a number of its parts come from factories there, the firm says.
Okada explains some suppliers have already warned that they may be unable to provide their products on time due to the idling of their Chinese plants, reports the Japan Times
“Our plants won’t be forced to halt operations [due to the lack of parts] for the foreseeable future, but if [the coronavirus] continues to freeze business activities in China, the impact will be unavoidable,” explains Okada. “We just don’t know yet when it will happen.”
South Korea’s Hyundai Motor Co and Kia Motors Corp are already feeling the pinch and have made plans to close most of their domestic assembly lines after Chinese supply chains were halted. Both companies says the shutdowns are because they have run out of a part called a “wire harness”, which connects a vehicle’s electronic devices.
Honda Motor Co is tipped to suffer the most from the deadly virus' spread given the Tokyo-based firm has plants in Wuhan, the epicentre of the outbreak, as well as relying on parts made in China.
A number of vehicle parts manufacturers have already indicated they may relocate their operations in China to other countries to minimise supply chain problems.
Mazda Motor Corp expects “an impact [on our sales in China]” from the shutdown of factories there. With regards to the possible disruption to the supply of parts, it says “a prolonged suspension would certainly have a negative impact on our car production”.
Bug hits Nissan sales
Nissan says its sales in China fell by 11.8 per cent in January year-on-year, as the Chinese New Year holiday began earlier than usual and the outbreak of coronavirus stifled economic activity.
The Japanese marque, which has launched a turnaround strategy to tackle a slump in sales, was counting on strong Chinese business. Nissan sold 118,143 vehicles in China last month.
