Nissan has announced it will begin procuring certain parts for production of a new light commercial vehicle directly from South Korea. The company’s subsidiary, Nissan Shatai Kyushu, which produces a range of LCVs, MPVs and SUVs, will source around 200 parts from 26 suppliers in South Korea for production of the NV350 Caravan, which begins in April this year, in an effort to reduce expenditure given the strength of the yen against the Korean won.
The new model is expected to bring the Kyushu plant's total annual output beyond 100,000 units for the first time in 2012.
Nissan Shatai established a special division last April to pick new parts makers especially in South Korea.
Nissan would not discuss the details of its sourcing operation in detail but as reported by Automotive Logistics last year, carmakers and tier suppliers looking to diversify their supply chain away from the high costs in Japan, as well as seeking to avoid future problems associated with natural disasters, are looking at South Korea as an increasingly attractive alternative (read more here).
Automotive parts suppliers including Bosch, BorgWarner, Continental and ZF, have already established plants there.
OEM interest in locations outside Japan was backed up by comments made by Nissan’s COO, Toshiyuki Shiga, speaking last July in the wake of the earthquake. He said that, in terms of domestic production, the company would look to its Tohoku suppliers to shift to other factories and then would look to other suppliers in Japan. Failing that Shiga said Nissan would start looking for overseas suppliers, which it now appears to have done.
3PLs and consolidators may stand to benefit from the move because parts shipped in volumes lower than one TEU will be consolidated en route to the ports of discharge. Consequently, feeder vessels will have to be operated at a higher frequency as the total exports from alternate destinations are expected to be on the rise.