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JAPAN: Steel shortage shuts several Nissan plants temporarily

By just-auto.com editorial team | 25 November 2004

Nissan will halt operations at three of its plants in Japan for five days starting later this month due to a steel sheet shortage, the Associated Press (AP) reported.

Company spokeswoman Mia Nielsen told the news agency it would be the first time that Nissan has halted plant operations because of such a supply shortage. The automaker plans to suspend operations at three of its four assembly plants in Japan from November 29 to November 30 and again from December 6 to December 8, she added.

AP said the production halt is expected to delay output of about 25,000 vehicles, including the new La Festa mini car and six other models but the company and its labor unions have agreed to boost output in January.

The Associated Press said Nissan's decision comes as its major steel suppliers, Nippon Steel and JFE Holdings struggle to meet strong demand in the face of high steel consumption in China and a tight supply of raw materials.

Stronger-than-expected demand for Nissan's new models introduced in September also caused steel shortage, Nielsen told AP.

The news agency noted that the tight supply of steel sheets to automakers comes on top of higher purchase costs as steel manufacturers, cautious about the costly expansion of blast furnace capacity, have been asking buyers to accept price hikes.

Nissan reportedly said it would halt one of the two production lines at its Kyushu plant in southern Japan and all lines at Oppama near Tokyo. Production at Shonan by subsidiary Nissan Shatai will also be suspended, it said, according to AP.

These plants make models such as the March [Micra], Cube, Elgrand luxury van, pickup trucks for export and the Tiida compact car introduced in late September, the Associated Press added.