Nissan Halts Production at Three Plants in Japan

TOKYO November 25, 2004; Mari Yamaguchi writing for the AP reported that Nissan Motor Co. said Thursday it will halt operations at three of its plants in Japan for five days starting later this month due to a steel sheet shortage.

It will be the first time Nissan has halted plant operations because of such a supply shortage, company spokeswoman Mia Nielsen said.

Nissan plans to suspend operations at three of its four assembly plants in Japan from Nov. 29 to Nov. 30 and again from Dec. 6 to Dec. 8, she said.

The production halt is expected to delay the output of about 25,000 vehicles, affecting new mini car La Festa and six other models, she said. The company and its labor unions have agreed to boost output in January to make up for the production stoppages.

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

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

For automakers, the tight supply of steel sheets 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 said it will halt one of the two production lines at its Kyushu plant in southern Japan and all the production lines at its Oppama plant in Kanagawa Prefecture, near Tokyo.

Production at the Shonan plant, also in Kanagawa, of Nissan subsidiary Nissan Shatai Co., will also be suspended, it said.

At those three plants, Nissan makes models such as the March, Cube, Elgrand luxury van, pickup trucks for export and the Tiida compact car introduced in late September.