TOKYO — Nissan Motor will shrink planned global production for October and November by 30%, Nikkei learned Thursday, as the worldwide chip shortage persists.
The Japanese automaker recently informed suppliers of its updated plan to make 263,000 vehicles in October and 320,000 vehicles in November. Both numbers undershoot the previous outlook by 30%.
Nissan had halted operations at a U.S. plant for two weeks in August due to stalled semiconductor output in Malaysia. But the pace of production through September exceeded forecasts, due in part to Nissan’s initial estimates being more conservative than other companies. The automaker was able to contain the negative impact of the chip shortage to an extent.
The production plan from October called for an increase in output compared to the previous year, but supplies of semiconductors tightened as other automakers ramped up production as well. That led to Nissan’s latest move to trim output compared to its previous plans.
Honda Motor also revealed Thursday that it expects to cut production by 10% at each of its three Japanese vehicle assembly plants in early November.
Projected domestic production is already being reduced by 30% on average this month. Output at the Suzuka plant in Mie Prefecture is down by 40%, while the Sayama plant in Saitama Prefecture is witnessing a 20% drop.
The third plant, the Yorii plant in Saitama, was not due for any production cuts in October, but the facility ended up scaling back by 10% due to the lack of semiconductors.
Although Honda is improving its production levels, manufacturing of the N Series minicars and the Vezel sport utility vehicles are still affected. Dealerships are facing yearlong waits for certain Vezel types and colors.
In the broader context, Japanese automakers as a whole are narrowing the margins of production cuts. Toyota Motor’s decision to reduce global output by 15% in November compared to its initial plans indicates progress from the previously announced 40% cut for October.
In Nissan’s case, the company’s current projected output in October will fall by 32% compared to year-earlier numbers, but the margin will improve to 21% in November. Toyota’s production volume in November is expected to be on par with the 820,000 units it made in November 2020, a record for that month.
“The impact from the semiconductor shortage is definitely improving,” said an executive at a vehicle manufacturer.
Automakers also see tight parts supplies easing. Toyota and its peers are preparing to boost production starting in December. At this stage, Nissan has not budged from its forecast that the chip crunch will diminish auto production by 500,000 units for the financial year ending March 2022.
“We estimate that we’ll be able to recover half of the reduced production volume in the second half,” said Nissan President and CEO Makoto Uchida.
What the future holds, however, remains far from certain.
“Every company is prioritizing semiconductors for popular vehicles and for products bound for markets where high demand is anticipated,” said Seiji Sugiura, senior analyst at Tokai Tokyo Research Institute. “Going forward, they will be tested on how well they allocate limited resources toward restoring production.”