Japan Auto Parts Makers May Move Plants to China, Official Says

Japan’s auto parts makers, faced with continuing production interruptions after the March 11 earthquake, may relocate more factories to China as a result of the disaster, according to a Chinese government official.

About 70 percent of car parts in China are supplied by local component makers and foreign companies with plants in the country, according to the nation’s Association of Automobile Manufacturers. Yet some parts used for engines and electronic components are mainly imported from Japan and other countries, Cheng Xiaodong, an official with the National Development and Reform Commission, said in a telephone interview today.

“Companies were not motivated to localize production of key components in China and the quake may change that if they face rising difficulties in the following months in supplying to their China assemblers,” said Cheng, who is in charge of the vehicle price monitoring arm of the state planning agency. “China is the world’s biggest vehicle market and producer and it makes sense for them to do so.”

Nissan Motor Co.’s Chief Executive Officer Carlos Ghosn said yesterday about 40 component suppliers in Japan remain in difficulty after the quake, complicating automakers’ efforts to restart production. Denso Corp., Aisin Seiki Co., Hitachi Ltd., and others parts makers suspended most or some of their production after the quake.

Japanese automakers accounted for 23 percent of car deliveries in China last year, according to the auto association.

--Tian Ying. Editors: Garry Smith, Ian Rowley.

To contact Bloomberg News staff for this story: Tian Ying in Beijing at +86-10-6649-7571 or ytian@bloomberg.net

To contact the editor responsible for this story: Kae Inoue at kinoue@bloomberg.net

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