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Nissan to cut car production due to lack of chips

Japanese carmaker to cut output of Note model by 5,000 units in January

Nissan will cut production of its flagship Note compact car by 5,000 units in January.   © Reuters

TOKYO -- Nissan Motor is to reduce production of automobiles due to a lack of semiconductors, Nikkei has learned.

The Japanese automaker will cut production of its flagship Note compact car by 5,000 units in January. The production reduction may continue in February.

The use of semiconductors in smartphones and communication base stations is increasing, and the supply for automobiles has stagnated. The lack of semiconductors has already affected other carmakers. Domestic rival Honda Motor also decided to reduce production starting in January.

It is getting difficult for Nissan to procure enough electrical parts that contain semiconductors. The carmaker had planned to produce around 15,000 units of its Note compact vehicle in January but will now reduce the figure by 5,000 units due to the lack of parts.

The Note is Nissan's best-selling model, the latest version of which came onto the market in December and has been produced in the company's Oppama plant in Kanagawa prefecture.

Nissan is aiming to produce 3.8 million units globally in fiscal 2021, which ends in March, 560,000 units of which are produced domestically. The company's production cuts in January account for just 1% of the annual production plan, but the lack of semiconductors is likely to remain as a long-term challenge, a company source told Nikkei. It is likely that Nissan will continue reducing production in February and beyond.

There is a global shortage of semiconductors due to brisk demand for smartphones and fifth-generation wireless base stations. A limited supply of semiconductors appears to be available for cars.

On top of Japanese carmakers, Germany's Volkswagen in December announced that it would cut production in China, North America and Europe. German auto parts suppliers Continental and Bosch have acknowledged that deliveries of their products have been delayed due to the same chip scarcity. Many carmakers buy parts from the two suppliers, therefore the supply shortage is likely to cause wide-ranging impacts across the industry.

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