A worker drives a forklift at the parts warehouse of Renault-Nissan China in Shanghai on Feb 15. Nissan and Toyota say although their businesses in China are facing pressure from the halt in production, they won't allow dealers to hike car prices. [Photo / Bloomberg]

Businesses say March 11 quake had limited effect on production in China

BEIJING - Japanese automakers are optimistic about production in China saying that there has been "almost no effect" on the supply of parts following the earthquake in their home country, thanks to a gradual resumption of output in Japan.

"Our inventory of Japanese-made auto parts can support local production until at least mid-April," said Shen Li, a spokeswoman for Nissan China.

"However, we have withdrawn extra working shifts on holidays and at weekends to ease the pressure on supply and to maintain stable and sustainable production in China."

According to Shen, the production hiatus could affect the production line and lead a short-term rise in energy costs.

"Because our output in Japan resumed on March 24, we believe a proper adjustment to the production shifts will help Nissan China weather the transition period," said Shen.

Niu Yu, a spokesman for Toyota China, said that there is "no problem" with the supply of parts for production in China, because the models manufactured locally have a "very high" localization rate.

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"For our high-end imported models, we can also promise a supply based on adjustments to our local inventory," said Niu. "And the March 21 resumption of output in Japan was good news for our supply in the future."

Both Niu and Shen told China Daily that although Japanese automakers in China face pressure after the halt in production, they won't allow dealers to hike car prices.

"We are actively communicating with dealers on maintaining price levels. The consumer should not pay for natural disasters," said Shen. "We have to be responsible to our customers and the market."

Other original equipment manufacturers in China such as Volkswagen, which also sources auto parts from Japan, said it has not encountered any issues arising from the situation in the country.

However, the consulting firm IHS Automotive said that despite automakers and suppliers in China saying that events in Japan have had minimal effect on production, behind the scenes there has been a flurry of activity as crisis-management teams assess the effect on their supply chains.

"The ports of Tokyo and Yokohama have begun operations but exports of both fully built vehicles and components remain low," said the IHS report.

"In the meantime suppliers and automakers in China will look to alternative sources to make up for the sudden shortfall in certain products," it added.