Nissan Motor’s chief executive on Thursday said the automaker was hurt more than its rivals by the recent steel shortage, and that production is expected to fall short by 15,000 vehicles in March next year.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
According to the Associated Press (AP),chief executive Carlos Ghosn said the production loss in March – an important month for selling cars in Japan – would amount to about 6 billion yen ($US58.5 million; €43.6 million).
Japanese automakers generally produce and sell more cars in March, which comes at the end of the fiscal year, AP noted.
Ghosn reportedly said March was the only month he was worried about, and that “the April situation should become very normal.”
The news agency noted that Nissan was forced to shut down three plants in Japan for five days, in late November and early December, as Japan’s steelmakers struggle to keep up with ballooning demand fuelled by China’s booming economy.
The Japan plant stoppages are the first for Nissan due to a supply shortage, and are expected to delay the output of about 25,000 cars, AP added.
According to the report, Nissan was hurt more than its rivals in Japan, partly because in September it began introducing a series of models within six months – a relatively short period.
“That makes us more vulnerable,” Ghosn told AP in Tokyo.
The Associated Press noted that the automaker has also trimmed the number of its suppliers as a cost-cutting strategy that began when Renault became Nissan’s partner and sent Ghosn to lead a turnaround five years ago, focusing on a limited number of steel and parts suppliers to bring down prices.
But Ghosn reportedly defended his cost-trimming programme, noting that the savings achieved by the supplier strategy totalled as much as 1 trillion yen ($9.7 billion; €7.3 billion), outstripping the value for the 15,000 vehicle shortfall.
Ghosn told the Associated Press his company was negotiating with South Korean steelmaker Posco and European steel giant Arcelor SA, which supplies Renault, to make up for the shortfall. He refused to say whether Nissan would have to pay a higher price for the steel.
