Nissan has leaned on “dual sourcing” and local supplychainsfor components as it adjusted to U.S.tariffs, its chief financial officer told CNBC. The Trump administration introduced 25% tariffs on foreign auto importsin April, causing some of the world’s largest auto stocks to plunge. Carmakerslooked to increase prices , introduce import fees, pauseproductionand even cut headcount in response. JeremiePapin, Nissan’s chief financial officer, told CNBC’s”Europe Early Edition”that his company was “not immune to it.””It’s a significant headwind for all importers into the US,” he added. He said Nissan has shifted its strategy in response, leaning on local supply chains and “dual sourcing”: getting the same parts from multiple providers. “We’vebeen doing a lot of adjustments, including increasing our production locally as fast as we could, and we took advantage of having dual sourcing for some of our key models,” Papin said. “As well as available capacity in North America,we’reconstantly looking at opportunities for further localization,” he added. The company has capacity in its U.S. plants, he added, saying: “We’reconstantly looking at opportunities for further localization. Papin also said the potential “nightmare” of the AI frenzy creating shortages of crucial chips was not as bad as was originally thought. “t’smore a handful than the risk it could have been.Sowedefinitely see, I would say, optimism building that it will not be the nightmare scenario that it could have been,” he added. ChipmakerNexperiahas been the subject ofexport controlsbecause itsproducts are sent to China for assemblying and testing, and then re-exported to customers in Europe and elsewhere. Itresulted in heightened technology transfertensions between the U.S. and China,which threatened globalsupply chains. However, Beijing and Washington reached a deal in November that saw that the former agree toexemptNexperiafrom tariffs. “There’sobviously been good decisions from theStates in terms offacilitatingthe export of the chips, and so we are just coping with it and being diligent in making quick decisions, finding alternative sourcing wherever we could,”Papin said. He added thatsupply”remains a threat,” butthe situationhasbeen improving “significantly.” He said that “Nissan has shifts off andnon-productiondays,” he said,referring to manufacturing pauses the company implemented while supply chain issues were being managed. In the Chinese market, Nissanis trying to give autonomy to local teams, “so that they really build fast the cars that the Chinese customers want,” per Papin. The carmaker aims to cut the time it takes to bring new models to market to two years, which is two-times faster than its historic production times. Nissan shares are down 21% year-to-date.
