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Nissan Suspends Production on Supply Chain Problems

A supply chain problem has forced Nissan to suspend production at several manufacturing facilities around the world. The carmaker said it will cease man...

Freddie Pierce
|Jul 16|magazine5 min read
A supply chain problem has forced Nissan to suspend production at several manufacturing facilities around the world. The carmaker said it will cease manufacturing of vehicles at some plants in the U.S. and Japan until the end of this week due to a shortage of engine controller devices.

A delay in the supply of electronic control units from electronic equipment maker Hitachi Ltd, is behind the decision, the carmaker said.

The problems at Hitachi are also affecting Honda and Fuji Heavy Industries.

“Hamstrung”
The Wall Street Journal reported that Hitachi said it is "hamstrung" by an electronics maker unable to fill an order for bespoke semiconductors designed for Nissan's engine management device.

The newspaper said delays in procuring custom-made chips from Swiss company STMicroelectronics N.V. (STM) are behind the production shortages.

Around five years ago, Nissan Chief Executive Carlos Ghosn streamlined the company's supply chain and moved to a lean manufacturing model.

“We are verifying inventories and are considering appropriate responses,” Nissan COO Toshiyuki Shiga told reporters on Tuesday.

AFP
quoted Shiga as saying the problem was a “random and unexpected case”.

Nissan has suspended production at the plants in Smyrna, Tennessee, and Canton, Mississippi, U.S.

In Japan, operations at Nissan’s four assembly plants have been suspended since Wednesday.

Integrated Circuits
The problem is believed to have occurred as delivery of integrated circuits used to produce the electronic auto parts at Hitachi Automotive Systems Ltd. started to be delayed earlier this month.

One Hitachi official said it was down to a tight demand-supply balance.

Link: Nissan

Edited by Chris Farnell