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Questions Remain Regarding Nissan Leaf Supply

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author photo by Autotrader March 2011

In the wake of an 8.9 magnitude earthquake – Japan's largest ever recorded – the country is suffering through a humanitarian crisis of incredible scope. As the magnitude of the toll has become clearer each day, many of Japan's most dominant industries have begun to assess damage to their workers, facilities, supply chains and delivery systems.

In particular, questions about the effect of the events on deliveries of Nissan Leaf electric cars have surfaced. Nissan is building a battery plant and retrofitting an existing assembly facility in Tennessee so that it can start building the Leaf in the US at the end of 2012, but for now, all Leafs sold globally are produced in a single factory in Oppama, Japan.

Although Oppama is south of Tokyo and outside the zone of the worst of the earthquake's effects, Nissan has suspended operations at it and other Japanese assembly factories since the earthquake occurred last Friday. The latest word is that the plant will open back up on Sunday March 20th, but in a statement Nissan said it had sustained some damage to the building and equipment. Nissan spokesperson, Katherine Zachary, told AutoTrader that it was too soon to be able to predict the full impact.

Three of Japan's nuclear power plants also sustained major damage and are either completely shut down or inoperable. As a result the country is experiencing rolling blackouts. Even if the factories do open up on Wednesday, the rolling blackouts will likely cause a reduction in output.

Nissan was able to send a shipment of 600 Leafs to the US the day before the earthquake and tsunami struck – and those cars will arrive and be delivered as scheduled – but the company is still trying to gauge how much of an effect the facility suspension and rolling blackouts will have on future Leaf deliveries. Including the 600 Leafs that left port ahead of the earthquake, Nissan says there are 1,500 Leafs available for delivery in the US before any disruptions will occur.

The supply disruption comes at a time when Nissan had started to turn a corner in keeping up with demand for the Leaf.

The car has been selling since last December but Nissan has struggled to deliver many of them in the US since then. The company took 20,000 pre-orders for the Leaf in the US, and suspended the process due to overwhelming demand. A few days before the earthquake, Mark Perry, Nissan's North American Manager of Product Planning, told AutoTrader that Nissan would be adding weekend and overtime shifts at Oppama to double the production level of the Nissan Leaf to about 4,000 vehicles per month.

At the time, Perry also said that by the end of March Nissan was on track to have built 10,000 Leafs in total – most of which have been sold in Japan. However, every day the Oppama facility is suspended about 120 fewer Nissan Leafs are built.

Given the degree to which Japan's electric supply grid has been damaged it is likely the rolling blackouts will continue for some time, causing disruptions well into the future. In response to the Japanese government's request to conserve energy, Nissan has also suspended air conditioning usage at several large buildings – including its headquarters – and has told its dealers to dim their lighting and turn off electric billboards.

Much remains to be clarified, analyzed and understood in the chaotic aftermath of such an event, and it is unclear what kinds of short term and long-term effects it will have on Japanese manufacturers selling vehicles in the US. Most likely the prognosis will depend on how quickly electrical supply can be returned to a normal level, supply chains can resume operations and docks can be cleaned up and repaired.

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This image is a stock photo and is not an exact representation of any vehicle offered for sale. Advertised vehicles of this model may have styling, trim levels, colors and optional equipment that differ from the stock photo.
Questions Remain Regarding Nissan Leaf Supply - Autotrader