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Japan Auto Makers Face China Headache
Tuesday, 08, June 2010

The dust may be settling on the now-ended strike at Honda’s plants in China over the past couple of weeks, but Japan’s auto industry has some serious thinking to do. How exactly is it going to serve growing demand in one of the world’s most important markets?At least, Toshiyuki Shiga, the newly appointed chairman of the Japan Automobile Manufacturers Association, believes it’s a serious issue.

At a meeting with reporters last week Mr. Shiga, also the chief operating officer of Nissan, said that while “It’s natural” that Chinese workers should ask for pay raises.After all, the strong demand for cars there means they’ll have to make more and more cars. But for Japanese auto makers, seen as lagging international peers in making inroads in what is already the world’s biggest auto market, rising labor costs are exactly what they don’t need as they consider shifting production capacity to China to meet demand.




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