Nissan, Honda delay restart of some China plants closed by coronavirus
22 February 2020 - Autoblog
And the ripple effect from closed parts plants will be felt worldwide
Japanese automakers delayed on Friday the restart of plants in China near the epicenter of a coronavirus outbreak, complying with authorities' directives but raising the risk of further supply disruptions that could hit global car production.
Nissan Motor Co said it would keep its plants in Xianyang in the central province of Hubei, and Zhengzhou in the neighboring province of Henan, shuttered after Monday, when it had planned to resume operations, but did not set a new date.
Honda said operations at its plants in Wuhan, Hubei's provincial capital in which the outbreak began, would remain suspended until March 11.
Toyota said it would resume production on Monday at its plant in Chengdu in the southwestern province of Sichuan, returning all four of its China assembly plants to operation from next week, but output would be limited at some.
In an email, Nissan said its delay was due to a directive by government authorities in Hubei asking firms to keep operations shut through March 10. Output issues at suppliers were also affecting vehicle production, it said.
The virus, which has killed more than 2,200 in mainland China, has wreaked havoc on the global automotive supply chain, stalling production at plants there and leaving automakers scrambling to source the roughly 30,000 parts each car needs.
"Wuhan is a city which produces virtually every type of component used in vehicles," said Takeshi Miyao, managing director of consultancy Carnorama.
"So not only are vehicle assembly plants in the city unable to source parts, vehicle plants all over the world which source parts from Wuhan are being affected."
He added that, where possible, automakers were securing parts from suppliers' plants elsewhere.
Some automakers were taking more direct approaches to procurement. This week, Jaguar Land Rover (JLR) said it had flown Chinese parts in suitcases to Britain to maintain production, and could run out of components in two weeks.
China's manufacturing sector is struggling to restart after an extended Lunar New Year break, hindered by travel and quarantine curbs across the country.
The suspension of output at Nissan's two plants, which make the X-Trail SUV crossover and the Altima sedan in a joint venture with China's Dongfeng Motor, comes as the automaker struggles to recover profitability after the arrest of its former chairman, Carlos Ghosn, in 2018.
Nissan has also cut output at some Japan plants over issues with procuring components, but said there had been no impact on other global plants.