Nissan will import parts from China for local assembly to resist the appreciation of the yen

According to the latest news from Bloomberg News, Nissan Motor Co. will purchase more parts and components in China and South Korea to reduce production costs.

CEO Carlos. Carlos Ghosn stated yesterday that up to 90% of the parts used in production at the Kyushu plant in southwestern Japan will be purchased from neighboring Asian countries and localities, and this proportion now accounts for 70%. According to company spokesman Chris Keeffe, about 79% of Nissan's export vehicles are produced at the Kyushu plant, including American slaves and Rogue who are exported to North America, Europe, Southeast Asia, and the Middle East.

Ghosn said that the wages of a factory in southwest Japan are lower than the national average. The government’s interim report put forward measures to cope with the appreciation of the yen, including increased subsidies for companies that build factories in the country.

"With high yen, production in Japan is obviously inefficient," said an analyst at Tokyo-based consulting firm Carnorama.

"Nissan Motor's Kyushu factory is one of the world's largest car factories," said Ghosn. Nissan’s goal is to produce more than 500,000 cars at the plant during the fiscal year. He also said that the "unusual" strong momentum of the yen will eventually stop, and Nissan will firmly maintain domestic auto exports at 1 million.

According to data from the Ministry of Labor of Japan, the minimum wage in Fukuoka Prefecture (approximately 1,005 kilometers, or 625 miles southwest of Tokyo) is 692 yen (9 dollars) in 2010. In contrast, the salary in Tokyo is 821 yen, and the national average is 730 yen.

According to Reuters latest news, Ghosn said that if the yen trend remains so strong within six months, Nissan may reconsider its industrial strategy. On Tuesday, one US dollar was about 76.5 yen. Ghosn said last week that the new Infiniti will be sold not only abroad, but also abroad. Nissan has decided that in 2012, Infiniti JX SUV production will be transferred from Japan to the United States.

Japanese car executives have repeatedly warned that the appreciation of the yen has exceeded the expectations of domestic exporters to make it unprepared. Despite these warnings, many car executives, including Ghosn, have always emphasized that they want to maintain a certain production scale in Japan in order to protect national production.