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May 04, 2011

Japan quake to halve Nissan 1-ton pick-up production until mid-May

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Production at Nissan South Africa’s (Nissan SA’s) plant in Rosslyn, outside Pretoria, resumed on Tuesday following an extended Easter period shutdown.

However, while NP200 and Renault Sandero production would be at full capacity, assembly of the NP300 one-ton pick-up for the local and export markets would be “40% to 50% of capacity”, said Nissan SA MD Mike Whitfield on Wednesday.

This was owing to the March 11 earthquake and subsequent tsunami in Japan which caused extensive damage to many component suppliers in the Asian country.

“Realistically, we expect to be back to full production in the third week of May,” noted Whitfield.

He expected to see the biggest impact on the operations of the local arm of the Japanese vehicle maker in this quarter, with the plant then able to recover any lost volumes through the remainder of the year.

He added that the South African new vehicle sales market was strong enough for “Nissan to see a full recovery” in terms of annual sales.

Whitfield added that Nissan SA sourced components from 16 countries, but that the bulk came from Japan.

The company was currently using airfreight to bring crucial parts to South Africa.

The company was also building some vehicles without one or two non-critical parts, and then retrofitting them as they arrived, such as headlights on a number of NP300s.

This was in line with a strategy devised by the Japanese parent company to ensure global production lines remained operational.

Nissan Africa, Middle East and India corporate VP Gilles Normand, who was visiting South Africa, noted that Nissan had lost 55 000 units following the earthquake.

Production at most of Nissan’s plants in Japan had now returned to normal, but as South Africa was quite a distance from Japan, the lag effect was around “three to four weeks”.

Normand said problems that remained for Nissan in Japan were patchy electricity supply at its one engine plant, which was damaged badly in the earthquake, and electronic component suppliers which were not yet at full production.

“All elements of the Nissan group are in full production, but the component part is updated daily. We expect April to June to be the most difficult [period], but for everything to be back on track by the end of September.”

Normand said 40 of Nissan’s 600 suppliers in the earthquake-hit area were “heavily affected”, with production halted at these sites. This figure had, however, now fallen to a single digit.

He added that the long-term goal was for Nissan to localise more components at its global vehicle production hubs, and to rely less on Japanese suppliers – a strategy which had been on the cards anyway as the yen was rendering production in the Asian country increasingly expensive.

“The earthquake may accelerate this process, yes,” noted Normand.


Edited by: Creamer Media Reporter
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