Nissan to cut production of top-selling model over Nexperia fallout

Nissan will cut production of its top-selling Rogue SUV in Japan from next week due to a short supply of chips from Dutch firm Nexperia, according to a person familiar with the matter, the latest fallout from the diplomatic turmoil involving the chipmaker.

Nissan plans to cut output of the Rogue sport-utility vehicle by about 900 vehicles in the week starting November 10 at its plant in southwestern Kyushu, said the person, who declined to be identified because the information is not public.

The carmaker is also reviewing planned output for the plant for the week of November 17 as the supply of parts using Nexperia chips remains impacted, the person said.

The Rogue, sold as the X-Trail in Japan and Britain, was Nissan’s top-selling model in the US last year at almost 246,000 vehicles. Nissan also makes Rogue models at Smyrna in the US state of Tennessee.

In a statement to Reuters, Nissan said it would implement “small-scale production adjustments” during the week of November 10 involving several hundred vehicles at the Kyushu plant and its Oppama plant, south of Tokyo, where it makes the Note compact.

It said the situation remained fluid and it was monitoring developments closely.

“Once supply stabilises, we will recover quickly and ensure any impact on customer deliveries is minimised,” it said.

Further details will be shared at second-quarter earnings on Thursday, Nissan said.

Carmakers scrambling with supply squeezed

Carmakers worldwide are scrambling to deal with the supply squeeze linked to Nexperia, which is hitting production and has caused some firms to furlough staff.

China banned exports of Nexperia products after the Dutch government seized control of the firm in September, citing fear of technology transfers to its Chinese parent, Wingtech, which the US has flagged as a potential security risk.

While most of Nexperia’s chips are produced in Europe, about 70% are packaged in China before distribution. China said on Saturday it would consider exemptions to the chip exports affected by the Dutch move. However, on Tuesday the Chinese commerce ministry issued a statement telling the Netherlands to “stop interfering” in Nexperia’s internal affairs.

A separate Kyushu plant run by Nissan subsidiary Nissan Shatai, which makes SUVs including the Patrol, is not affected, the person said.

A Nissan Shatai spokesperson told Reuters there was no impact on production at the moment, adding it was watching the situation carefully.

Nissan said last week supply chain risk including issues stemming from Nexperia would be the carmaker’s biggest headwind in its fiscal second half, and chief performance officer Guillaume Cartier told reporters Nissan was “OK to the first week of November” in terms of chip supply.

Honda suspended production at a Mexican plant last week and made adjustments to its production in the US and Canada over the issue.

Car suppliers use Nexperia chips in parts that range from brakes and electric windows to lights and entertainment systems.

Reuters