Mazda to reduce dependence on Chinese parts as sales stall - Drive

2022-09-10 10:07:39 By : Mr. Da Xu

Between April and June, deliveries of new Mazda vehicles in Australia dropped by almost 40 per cent, with Chinese parts suppliers given the blame.

Japanese car maker Mazda says it plans to reduce its reliance on Chinese components, after blaming vehicle manufacturing delays on widespread parts shortages.

The revelation comes as Mazda sales in Australia were down 39 per cent for the three months period from the start of April to the end of June 2022, compared with the same time last year.

Parts shortages – triggered by interruptions to production due to employee absenteeism during COVID waves – have crippled most major automotive companies globally.

However, Mazda appears to be taking a more drastic approach to boost production.

Mazda has reportedly instructed its suppliers to increase parts stockpiles in Japan and diversify production outside of China, as reported by news agency Reuters from a recent Mazda investor presentation.

Data from the Federal Chamber of Automotive Industries' monthly VFACTS report shows a 16.7 per cent drop in sales of Mazda cars for the first seven months of the 2022 calendar year (compared to the same period in 2021) amid an overall market downturn of 4.5 per cent.

As reported by Mazda executives late last week, pandemic lockdowns in China have meant ongoing supply disruptions for the carmaker, resulting in a $US144.4 million ($AU204 million) operating loss for the first quarter of the Japanese financial year (April to June).

Contracts held with Japanese and European companies haven’t changed the outcome, with most businesses basing their parts manufacturing in China.

Takeshi Mukai, a senior director at Mazda, says the company will be seeking manufacturing diversification outside of China when it negotiates future contracts with parts suppliers, as well as requesting higher inventory stocks within Japan to help offset supply disruptions.

Ben Zachariah is an experienced writer and motoring journalist from Melbourne, having worked in the automotive industry for more than 15 years. Ben was previously an interstate truck driver and completed his MBA in Finance in early 2021. He is considered an expert in the area of classic car investment.

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