Virus, parts worries rattle Japan's industry

TOKYO — The global coronavirus outbreak is beginning to hobble Japan's domestic auto industry with snarled supply chains, planning mayhem and problematic product launches, even as the government races to curb the spread of the sickness through this densely populated island nation.

Across Japan, carmakers are monitoring procurement issues to head off any disruption of components from China, where factory production has been restrained for the past few weeks. And the normal flow of Japan's business has been complicated as companies shun large gatherings and take other precautions to avoid the illness, officially known as Covid-19.

Japan reported 891 cases of people testing positive for the virus by late last week, making it one of the biggest concentrations of infections outside China, the outbreak's epicenter. Normally bustling cities such as Tokyo were subdued as people stayed off the streets, partly because Japan's government encouraged organizers to postpone group events.

"At this point, we are at a crucial moment in preventing the escalation of mass infection," Chief Cabinet Secretary Yoshihide Suga told journalists. "To have absolute and effective infection prevention measures and to curtail the speed of any increase in patients are critically important."

Nissan Motor Co., sorely hurting for new vehicles, was forced to scrub the live unveiling of its long-awaited Roox minicar here out of fears of spreading the illness. Nissan asked journalists to stay away and instead watch a webcast of the debut conducted at company headquarters in Yokohama.

Toyota Motor Corp. canceled its annual supplier meeting. The gala confab at the Nagoya Congress Center draws hundreds of executives from around the world for a night of pep talks, back-patting, fine dining and entertainment with Toyota's top brass.

Toyota also shelved all nonessential business travel, both inside and outside Japan.

The industry consulting group IHS Markit canceled its on-site spring conference in Tokyo and went virtual instead. The all-day series of presentations draws hundreds of people.

The virus also began rattling domestic production plans.

Nissan had already temporarily suspended production at several subsidiary plants because it was having trouble sourcing enough parts from China, where work stoppages resulting from the virus have interrupted output and logistics. The affected Nissan plants make the Rogue and Rogue Sport crossovers, the Serena van and other nameplates, including the Patrol SUV.

Nissan was the first Japanese automaker to suspend work at domestic plants. Nissan's plants in China, now the company's biggest market, were already offline because of the virus.

Toyota said its factories in Japan were expected to operate normally through the week of Monday, March 2. But it was still assessing the impact of possible parts shortages on output from March 9.

Toyota is dialing down production of parts in Japan that feed operations in China.

Kazuo Kato, chairman of the Japan Automobile Dealers Association and a Honda dealer, said disruption of Chinese component supply lines could delay Honda's new-car deliveries in Japan by a month.

"I can't imagine things would not become more severe," Kato told Japan's Nikkan Jidosha business newspaper. "Other carmakers may be forced to delay deliveries."

The Japan External Trade Organization said last year that more than 150 Japanese companies have operations around Wuhan, the Chinese city at the center of the contagion. About half are related to the automotive sector.

Amid mounting concerns, Japan's industry set up a task force to respond to a potential widening of the problem at home and overseas and to troubleshoot possible kinks in the supply chain.

The group brings together the Ministry of Economy, Trade and Industry, the Japan Automobile Manufacturers Association and the Japan Auto Parts Industries Association.

Naoto Okamura contributed to this report.