Japanese automotive components manufacturer Marelli Corporation announced a reorganisation of its production bases in Japan, including the closure of four manufacturing facilities, mainly in response to weak demand from its key vehicle manufacturing affiliate Nissan Motor.
Calsonic Kansei Corporation formerly changed its name to Marelli Corporation earlier this month to reflect the EUR6.2bn takeover earlier this year of Italian component manufacturer Magneti Marelli.
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The company said that once the four plants are closed down, it will either transfer production to other plants within the Marelli group or outsource the products from third party manufacturers.
The Calsonic Kansei Tochigi facility, which makes cockpit module parts and other interior components, and the Sano Plant District 1 facility which makes heat exchangers and climate control systems, will be closed by the end of February 2020.
The Calsonic Kansei Utsunomiya and Calsonic Kansei Yamagata facilities, both of which make air-conditioning compressors, will be closed by the end of September 2020 and October 2020 respectively.
Marelli said the changes were part of its “ongoing strategy to ensure its operations are structured in a way that can best respond to the significant changes within the global and domestic automotive industry”.
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By GlobalDataIt added it saw no viable alternative to the closures following a thorough review of its operations.
The company said it was working to strengthen its position as a global Tier 1 supplier, by focusing on growing its business through customer and product diversification, cost leadership, the development of a world class product portfolio and targeted technology leadership.
It added that. as domestic automobile production continues to slow down, it was imperative to build a production system that could withstand the industry headwinds and meet the demand of global customers.
Japan is scheduled to hike its sales tax rate from 8% to 10% at the beginning of October 2019 with domestic vehicle sales expected to fall after a moderately positive performance in the first eight months of the year.
