Chip shortage forces Nissan to cut Note compact car production

TOKYO: Nissan Motor Co Ltd said on Friday it would cut production of its best-selling Note compact car this month due to a shortage of semiconductors, becoming the latest carmaker to be hit by a chip crunch as demand rebounds from the coronavirus crisis.

Japanese peer Honda Motor also said on Friday that its output in Japan could be affected by a shortage of semiconductors.

Automakers and electronic makers are facing a global shortage of chips as consumer demand has been bouncing back from the coronavirus pandemic, causing manufacturing delays.

Nissan said it planned to reduce production of the Note, a hybrid electric car, at its Oppama Plant in Kanagawa prefecture, Japan, but did not give details of the scale of the output cut. The Nikkei newspaper reported that Nissan would slash its Note production at Oppama to about 5,000 units in January, from an initially planned 15,000 units.

"A global shortage of semiconductors has affected parts procurement in the auto sector. As a result of this shortage, the Oppama Plant in Japan will adjust production in January, reducing production of the Nissan NOTE," Nissan said in a statement.

Germany's Volkswagen said last month that it faced a shortage in the supply of semiconductors and would adjust production at facilities in China, North America and Europe.

Honda has also begun "seeing some impact in the parts supply," a company spokesman said. He added that the company was examining output adjustments for each car model.

Honda will first shrink its production by about 4,000 units this month, mainly affecting the Fit subcompact made at a plant in the city of Suzuka in Mie prefecture, the Nikkei newspaper said on Friday.

A massive fire at a chip plant owned by Asahi Kasei Microdevices Corp (AKM), a unit of Asahi Kasei Corp, in southern Japan in October has also damaged semiconductor supply.

While Honda's semiconductor inventory is secured until February, the company is "currently under examination for supplies from then on, including alternative supplies," the spokesman said.

Separately, China's GAC said its joint venture with Honda had received warnings on supply of certain models, but gave no details.

China's Dongfeng Motor, which also has a partnership with Honda, did not immediately respond to a request for comment.