Nissan has leaned on “dual sourcing” and local supply chains for components as it adjusted to U.S. tariffs, its chief financial officer told CNBC. The Trump administration introduced 25% tariffs on foreign auto imports in April, causing some of the world’s largest auto stocks to plunge. Carmakers looked to increase prices , introduce import fees, pause production and even cut headcount in response. Jeremie Papin, 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’ve been 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’re constantly looking at opportunities for further localization,” he added. The company has capacity in its U.S. plants, he added, saying: “We’re constantly 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’s more a handful than the risk it could have been. So we definitely see, I would say, optimism building that it will not be the nightmare scenario that it could have been,” he added. Chipmaker Nexperia has been the subject of export controls because its products are sent to China for assemblying and testing, and then re-exported to customers in Europe and elsewhere. It resulted in heightened technology transfer tensions between the U.S. and China, which threatened global supply chains. However, Beijing and Washington reached a deal in November that saw that the former agree to exempt Nexperia from tariffs. “There’s obviously been good decisions from the States in terms of facilitating the 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 that supply “remains a threat,” but the situation has been improving “significantly.” He said that “Nissan has shifts off and non-production days,” he said, referring to manufacturing pauses the company implemented while supply chain issues were being managed. In the Chinese market, Nissan is 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.
