Nissan: U.S. market share may fall due to parts

There is a risk that Nissan Motor Co’s (7201.T) U.S. market share, which has been on the rise, may fall due to a lack of auto parts from Japan, North American Chairman Carlos Tavares said on Wednesday.

Tavares said the risk would be minimal if suppliers could quickly support a ramp-up in production. Speaking to Reuters on the sidelines of the New York Auto Show, he called the next few weeks “critical” to gauging the health of parts suppliers.

Through March, Nissan had 9.3 percent of the market share in the United States for the year, according to Autodata. The company finished last year with share of 7.8 percent.

“It’s fair to say that there is some risk,” Tavares told Reuters of losing market share in the United States. “We think it’s not going to be very big if we are able to ramp up.”

Automakers have been plagued by parts shortages, especially specialized electronics, since the March 11 earthquake and tsunami in Japan.

Nissan in North America has “significantly” more than a 25-day supply of vehicles to help it weather the parts crisis, Tavares said. When the earthquake hit on March 11, Nissan had a 70-day supply of cars.

“Luckily, we had some inventory and a cushion. We expect that the ramp-up will catch up before we reach a point of disruption,” Tavares said.

He said the company expected to be at 50 percent production within a few weeks and at full production by May or June, when it would see if the supply chain could support increased production.

At the time of the March 11 earthquake and tsunami in Japan, Nissan’s inventory was about 45,000 cars above its year-ago level, Tavares said, adding that cushion was expected to last until production increases.

“Hopefully we will not lose momentum or not much momentum,” he said.

So far, the industry and Nissan are gaining a better grasp of the parts shortages, Tavares said. The number of parts the company is closely monitoring has shrunk and there are fewer surprises.

“Parts which were in short supply yesterday are fixed today,” he said. “In some cases, we changed the sources. In some cases, the supplier fixed the plant.”

Nissan was among automakers that moved to relying heavily on single suppliers for individual parts for cost and efficiency. Tavares said he does not expect a big change in auto industry practices because of the parts shortage.

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