In a bid to keep production lines moving on factories that are still open, auto suppliers are considering -or in one case have already- moving production parts outside China due to the coronavirus outbreak.
One Japanese supplier has already shifted production of parts from Mazda from China’s Jiangsu to Mexico’s Guanajuato state in order to deal with shortages, Reuters reports.
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The supplier, which produces an exterior component used in the exterior trim of the Mazda3 and CX30 models, basically increased the output of the part at its Mexico plant by 50 percent. The Mexico-made parts are then airlifted back to Mazda’s assembly line in Japan, a move that has cost the Japanese automaker more than $5 million in total, according to an unnamed source.
“Substitute production costs an arm and a leg,” said the source. “But Mazda doesn’t want to stop production and have asked us to keep our supply coming. They are taking on the expense.”
A Mazda representative said that they are “assessing various countermeasures for swift recovery while minimising the impact on production at the same time”.
Meanwhile, the world’s biggest maker of automotive lighting and a supplier to Toyota, Nissan and others, Koito Manufacturing stopped the production of LED headlights and taillights at its factory in China’s Hubei province, which is the epicenter of the virus outbreak, before partial operations resumed.
Koito is now planning to move some production elsewhere in order to fulfill its export orders. “There are lamps that we make for vehicle models made in North America, Japan and China, which are fairly similar between those regions,” a company spokeswoman said.
Kasai Kogyo, a Honda supplier of interior door trim and roof parts, is also looking to shift production from its plant in Wuhan, China to one of its many factories in North America, Europe and Asia, but the move alone would drive up costs and take months to implement.
