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Mazda Is Attempting To Lessen Its Reliance On Chinese Sources Following COVID Lockdowns

Mazda Is Attempting To Lessen Its Reliance On Chinese Sources Following COVID Lockdowns
Mazda Motor Corp of Japan stated on Friday that following COVID-19 lockdowns in Shanghai disrupted supplies and hampered production, it will ask its parts suppliers to expand stocks in Japan and create components outside of China.
The request from the Hiroshima-based manufacturer highlights the vulnerability of vast supply chains that have been put to the test by the pandemic and geopolitical tensions, throwing doubt over enterprises.
The Japanese automaker recorded an operating loss of 19.5 billion yen ($144.4 million) for the first quarter of its fiscal year on Tuesday, owing to disruptions caused by China's tough COVID-19 counter-measures.
Mazda stated that it brought semiconductors and critical vehicle parts to China for assembly but was unable to get them due to the city's shutdown.
Even though Mazda's direct suppliers were Japanese and European firms, parts were still going through China, according to Takeshi Mukai, the automaker's senior managing executive officer.
"In our case, we were the first to be affected by the lockdown, as we had been promoting the procurement of parts via China for a while," Mukai said. "Given the current (zero-COVID) policy, the key point is to keep (parts) in our hands."
Mazda will seek higher local inventories and diversity of production outside of China when forging long-term contracts with suppliers for creating new models, he said.
He also stated that the manufacturer will aim to simplify its procurement system in order to reduce the frequency of distribution between locations.
"As we continue to do business globally, we must manage the current changes based on the recognition that we are no longer in the era of globalisation as we were in the past," said Mazda senior managing executive officer Masahiro Moro.

Christopher J. Mitchell

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