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China steps in to fill Japan supply chain

A Nissan worker demonstrates the operation of a remote maintenance service.

STEVE CHIOTAKIS: Today Toyota said its gonna stop production at some of its North American plants because of a parts shortage. Supply chain woes mean a lot of parts are hard to find because of the Japanese earthquake and tsunami.

Marketplace Asia Bureau Chief Rob Schmitz reports from Tokyo, some manufacturers are looking elsewhere for those parts.


ROB SCHMITZ: A couple of decades ago, most automakers and big electronics manufacturers assembled their products in Japan. Now much of it's done in China. But custom-made and higher-tech parts requiring more skill to manufacture are still made in Japan. Since the earthquake, though, Japan's had a hard time making and shipping these products abroad. And at least one country wants to fill that gap.

TOSHINORI NEMOTO: Chinese companies are now able to make high quality precision products.

Japanese supply chain expert Toshinori Nemoto.

NEMOTO: So I think they'll grasp this opportunity and they'll now become an even bigger part of the supply chain.

It's already happening, says Nemoto. Nissan has already started switching its precision parts suppliers to China. Nemoto says once they move for a disruption like this -- the big companies aren't likely to return to Japan even after things return to normal. It's an industry worth billions -- billions that Japan stands to lose.

In Tokyo, I'm Rob Schmitz, for Marketplace.

About the author

Rob Schmitz is Marketplace’s China correspondent in Shanghai.
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