Suzuki to Reduce Production of Vehicles Due to Steel Shortage

Suzuki Motor Corporation said it will be reducing Japanese production for a second time in four months because of a steel shortage. Suzuki will be cutting production from January, 2005 to March, spokesman Takuma Mizuyoshi said, confirming a Nihon Keizai newspaper report. The carmaker will make 20,000 units fewer than planned, the report said. Mizuyoshi would not confirm the figure.

Suzuki is cutting production by 13,000 units this month as the high demand for steel from Chinese companies, shipbuilders and appliance makers has made the metal more scarce. Nissan Motor Co., Japan's second-largest carmaker, has also had to scale back production due to a lack of steel. Both companies have turned to Posco, South Korea's largest steelmaker, for assistance.

The shortage in steel was further caused by carmakers such as Nissan, which is releasing six new vehicle models in five months from September to bolster sales, said Itaru Koeda, chairman of the Tokyo-based Japan Automobile Manufacturers Association and a co-chairman of Nissan.

Japan's steelmakers are providing more steel to automakers by reducing their exports and raising their production efficiency, Koeda said. The companies are also improving their technology to be able to produce more sheet steel while using less alloy, he said. Suzuki already buys steel from Posco in Hungary where it makes the Ignis cars, the company's Mizuyoshi said.

The cuts will mean overall production in the second half ending March 31, will rise by a smaller-than-expected 11 percent or 13 percent, compared with a planned 17 percent increase, Suzuki said.
"Suzuki appeared to have mentioned that they would like more steel in working level meetings, but they haven't requested officially,'' Posco's spokeswoman Kim Soo Jung said.