Nissan Motor has delayed the resumption of plants in China near the epicenter of a coronavirus outbreak, adhering to authorities’ directives, but raising the risk of additional supply disruptions that could hit worldwide car production.
Nissan stated 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 prepared to restart operations, but did not set a new date.
In an email, Nissan stated its delay was because of a directive by government officials in Hubei asking the company to keep operations shut through March 10. Output issues at providers were also affecting vehicle production, it stated.
The virus, which has killed over 2,200 people in China, has disrupted the global automotive supply chain, stopping production at plants there and leaving automakers scrambling to source the approximately 30,000 parts each car needs.
“Wuhan is a city which produces basically every type of component used in vehicles,” stated 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, auto manufacturers were securing components from suppliers’ plants elsewhere.
The suspension concerning the output at Nissan’s two plants, which make the X-Trail SUV crossover and the Altima sedan in a joint venture with Dongfeng Motor, comes amid the automaker’s struggles to recover profitability following the arrest of its former chairman, Carlos Ghosn, in November 2018.
Nissan has also slashed output at some Japan plants over issues with procuring components, but stated there had been no impact on other plants in the world.