Nissan Watches Supplier Closely for Quality Concerns

IHS Global Insight

December 2, 2013

Nissan is sprucing up its oversight of affiliated parts supplier JATCO in the wake of quality and customer satisfaction problems amid launch-related glitches with the continuously variable transmissions (CVT) supplied by the company, reports Automotive News. Nissan's chief executive, Carlos Ghosn, says his team will be watching JATCO "more closely" to ensure that any new technology introduced by the supplier meets customer satisfaction.

"Every time you launch a new CVT, you always have some risks. So we now have a process by which, before we launch any new CVT, they (JATCO) come before the Nissan executive committee to explain all the measures they have taken to make sure there are no surprises," Ghosn was quoted as saying.

As Nissan adds new plants worldwide to boost output, JATCO is apparently struggling to keep pace. Last month, Ghosn called the supplier one of several "headwinds" to slow down his aggressive global business plan to achieve an 8% operating profit margin by March 2017. Nissan will also send its most senior North American manufacturing and supply chain executive, Bill Krueger, to JATCO, in which Nissan has a 75% stake. Krueger, a one-time Toyota manager, helped Nissan bounce back from a series of quality glitches stemming from the rapid launch of Nissan's assembly plant in Canton, Mississippi (United States) in 2006. However, JATCO's chief executive Takashi Hata feels that the problem is more related to customer perception. Hata thinks some Nissan owners are not yet comfortable with operating JATCO's fuel-efficient CVTs, which are apparently central to Nissan's small-car strategy as most Nissan vehicles feature one. In fact, CVTs are standard non-manual transmissions for every car and crossover in the Nissan line-up, except for the electric Leaf, and low-volume 370Z and GT-R sports cars.

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