Japanese automakers aren’t wasting any time in finding alternate manufacturing strategies to reduce the reliance on China amid diplomatic tensions. Nissan Motor Co. is reportedly going to build a new plant in Thailand in 2014 to the tune of ¥30 billion (approx. $376 million), according to the Nikkei business paper. Toyota and Honda, Japan’s other largest car manufacturers which heavily rely on Chinese labor, are also among those looking to relocate in Southeast Asia after the Senkaku/Diaoyu Islands dispute has poisoned Japan-China relations.
Nissan has initial plans for the Thai plant to output around 100,000 vehicles per year, including passenger cars and pickup trucks. They later hope to increase that to 200,000 units annually, which would be double what is currently produced in Thailand. Nissan is said to be fairly behind Toyota and Honda when it comes to sales and production in Southeast Asia, and is looking to catch up to its rivals.
While not as big sellers as the other three, Mazda has also just been revealed to expanding its production in Vietnam with a car engine factory to be added with an existing assembly plant. As the eruption of tensions over the last month between China and Japan about their territorial dispute resulted in violent protests and damaged Japanese factories, the anti-Japan sentiment is wreaking havoc on the auto and tourism industries. Car manufacturers have reported sales declines as high as 50% for the month of September, and that trend is predicted to continue for some time.
Comments Off on JDP Startup Corner: Pros & Cons of Working with a Partner in Japan