MARCH 20, 2011, 12:12 P.M. ET.

Nissan to Resume Production in Japan

By YOSHIO TAKAHASHI

TOKYO—Nissan Motor Co. said Sunday that it will start parts production and vehicle assembly operations this week in Japan, becoming the first car maker to restart its entire auto production process after a devastating quake brought the country's auto industry to a standstill.

While most car makers didn't see their auto factories heavily damaged by the massive earthquake and tsunami that struck northeast Japan on March 11, the disaster disrupted parts deliveries from suppliers in the region as power outages, severed roads and gasoline shortages disrupted logistics operations.

Some car makers temporarily started parts manufacturing and vehicle assembly operations last week and others plan on similar operations this week, while most auto makers have yet to decide on when to resume production on a full-scale basis.

The lack of parts has also dogged production by foreign car makers such as General Motors Co. and Renault SA using Japan-made auto components.

Nissan, Japan's second biggest car maker by volume, said it will resume production of parts at six factories in Japan from Monday and will also begin assembling vehicles at five of the six factories from Thursday using parts expected to be procured by then.

Under the planned restart of parts production, the car maker will make replacement parts for the domestic market and parts needed for its overseas plants at the six plants in Kanagawa, Tochigi and Fukuoka. But the company added that it has yet to determine when it will start operations at its engine plant in Iwaki, Fukushima, close to Tokyo Electric Power Co.'s crippled Daiichi nuclear power plant.

Nissan may not be able to run its production lines at full capacity when it restarts operations at the plants, a Nissan spokesman said. Another disruption may occur as rolling blackouts are continuing in the greater Tokyo area and the radiation leakage from Fukushima Daiichi nuclear plant, about 200 kilometers northeast of Tokyo, has yet to be settled, while some gasoline stations remain closed.

It is not that Nissan is particularly well-positioned to procure parts under the current circumstances and there shouldn't be any major difference in its ability to secure parts compared with other car makers in Japan, the Nissan spokesman noted, adding that it is contingent on each car maker whether to resume production.

Honda Motor Co. said Friday that it will continue to suspend automobile and motorcycle assembly operations through Wednesday, as about 30% of its 110 suppliers in the quake-hit region for its four- and two-wheeled vehicles are finding it hard to resume operations anytime soon.

Toyota Motor Corp. started production of auto parts at seven domestic plants last Thursday. But the auto giant suspended vehicle assembly until Tuesday while working on procuring auto parts.

Mazda Motor Corp., which suspended all domestic production since the quake, said Friday it plans to temporarily resume production of replacement parts, parts for overseas plants and vehicles in process from Tuesday at its plants in Hiroshima and Yamaguchi, both in western Japan.

Mitsubishi Motors Corp., which operated its three plants in Japan on Thursday and Friday, will halt production Saturday through Monday—a three-day weekend in Japan—and will resume operations on Tuesday. The company will decide later on its production plan from Wednesday onwards.

Among foreign brands, GM said last Thursday it plans this week to idle a Shreveport, La., plant that builds small pickup trucks, citing short supplies for a Japan-made part, while French car maker Renault SA is trimming back production of high-end sedans at a plant at Busan, South Korea, operated by its Renault Samsung Motors subsidiary due a shortage of parts produced in Japan.

Write to Yoshio Takahashi at yoshio.takahashi@dowjones.com

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