Chip shortage stings Japan's agile industry

TOKYO — Fortress Japan has weathered the global microprocessor shortage largely unscathed so far. But as the crisis wears on, output here is now getting a taste of the supply chain trouble.

Mazda, Subaru, Nissan and Mitsubishi are paring output to battle the bottleneck, and production suspensions will dent output across Japan in July. The downtime amounts mostly to a smattering of days here and there, but it comes as Japan's automakers try to steer through a global shortage that began in late 2020.

The Japanese industry's long tradition of flexible manufacturing and transparent supply chain management has helped the companies pivot through the worldwide trouble. But the longer the crisis continues, the harder it is to cope.

"Almost every day, we reassess supply and allocation. It's a balance of what kind of chips are available, what demand we face and in what markets," said a person close to Nissan Motor Co.'s board. "We are prioritizing chips for profitability, allocating them to the products that are most profitable."

Mazda Motor Corp. said last week that it will suspend production for a total of 10 days in July at its Hofu plant in western Japan, where it makes the Mazda2, Mazda3 and CX-3.

Subaru Corp. announced a one-day stoppage at its two plants in Gunma, on July 16. Those lines churn out several key vehicles exported to the U.S., including the Forester, Crosstrek, BRZ and WRX — although a one-day interruption likely will have only limited impact.

Nissan will idle lines at several facilities in Japan next month, according to Reuters.

While declining to confirm specifics, a Nissan spokeswoman said Japan's No. 3 automaker is "adjusting production due to this shortage and taking necessary actions to ensure recovery." It will suspend its Tochigi plant in eastern Japan for three days and one of its Kyushu plants in southern Japan for two days. Meanwhile, it will operate its other Kyushu plant on only one shift for a period of time and keep operating its Oppama plant outside of Tokyo without a night shift.

Nissan has warned it will lose 500,000 units of output worldwide in the April-September period. But the company also said it expects to make up half of that shortfall later in the fiscal year.

It is now rationing chips to ensure supply for popular, new or profitable products.

For instance, the company suspended output of the Infiniti Q50 sedan from Japan this month to save chips for the newly launched QX55 crossover and the upcoming redesign of the QX60 crossover.

Nissan's alliance partner Mitsubishi Motors Corp. also reportedly is trimming production.

It expects to cut 20,000 vehicles from its schedule at its Mizushima and Okazaki plants in Japan, where it makes minicars and the Outlander and Eclipse Cross crossovers, Japan's Nikkei said. Mitsubishi expects a global hit of around 80,000 vehicles in the current fiscal year ending March 2022.

Toyota Motor Corp., the world's largest automaker, has said it expects only minimal impact from the global microchip shortage.

But that doesn't mean the Toyota Group is completely out of the woods. Even Daihatsu, Toyota's minicar affiliate, was among those warning of downtime last week. It plans two days off in July at a plant that makes small cars for the Japan market.