Auto supply chain stretched as sector grows faster than expected

An electronics component manufacturer has said rapid recovery in the automotive sector has put its supply chain under pressure to keep up with demand. The statement from STMicroelectronics, which makes components for several sectors, follows Nissan’s decision to reopen four Japanese factories after a three-day closure caused by supply problems. The halt to production was caused by a delay in delivery of parts from manufacturer Hitatchi. Hitatchi, in turn, uses components from ST in its Nissan parts.

A spokeswoman for ST said: “It is not ST’s policy to comment on customers’ statements. “We can only recall it’s a known fact that the recovery of the automotive business after the crisis is taking place at a faster rate than expected and that the whole automotive electronics supply chain is currently under pressure to keep up with the market’s demand. Nissan could not comment on how much it lost because of the supply chain interruption, or whether the firm would be seeking compensation from Hitachi.

Since the manufacturing sector has recorded strong growth this year, commentators have noted that buyers would see stretched supply lines and increasing prices, following the slashes in inventory made necessary by the recession.

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