Coronavirus hits Nintendo Switch supplies to Japan

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Nintendo Switch
Image caption,
Nintendo's Switch has been a huge sales success

The coronavirus has hit supplies of Nintendo's Switch console to its home market in Japan.

The games giant's chief executive, Shuntaro Furukawa, said last week that production in China of the device had been affected by the epidemic.

But delays in shipments from China to Japan were now "unavoidable" Nintendo said on Friday. It was unclear if other markets would be disrupted.

On Wednesday, carmaker Tesla warned of disruption to its China operations.

Deliveries within China of Tesla's Model 3 vehicle would be temporarily delayed, a company executive said, following an extended production shutdown. Shares in the company, which have risen sharply recently, sank 17%.

Rising death toll

Nintendo began moving part of its production to Vietnam from China in 2019 as supply chains were hit by the Sino-US trade war. But it does not have enough capacity in the Southeast Asian country to offset the disruption from the outbreak.

Nintendo said production and shipping of peripherals such as Joy-Con controllers to the Japanese market would also be hit.

Supply of the Ring Fit Adventure gadget, already hard to find in some countries, is also being affected, Nintendo added.

The death toll from the coronavirus in mainland China has jumped by 73 to 563, with total confirmed infections standing at more than 28,000 there, while 10 more people on a quarantined cruise liner in Japan have tested positive for the virus.

Image source, EPA
Image caption,
Elon Musk's Tesla began production in China in October last year

Major motor manufacturers with operations in Asia have reported that the outbreak of the new virus, and measures to limit its spread, are having a negative impact on supply chains.

Tesla plans to restart production on 10 February, according to a social media post on Weibo from Tesla Vice President Tao Lin.

Tesla's vast new factory, which began operations in October 2019, is a crucial part of its plans to make more than 500,000 cars this year. Its first "Made in China" cars were delivered at the end of last year, marking a major milestone for the company.

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The company's shares have risen sharply in recent months after it posted a rare quarterly profit in October and hit delivery targets.

Last month, Tesla replaced Volkswagen as the world's second most valuable carmaker, after a dramatic rise in share price pushed its market value to more than $100bn.

This week the company's stock market valuation passed the $150bn mark. It now ranks as the world's second most valuable car company after Toyota.

China is a major manufacturer of car parts and with factories closed across the country the global motor industry is facing major disruptions to supplies.

On Tuesday Hyundai, the world's fifth biggest car maker, said that it had shut all of its factories in South Korea because it had run out of Chinese components. Hyundai has said it aims to resume production at the plants early next week.

Other major carmakers, including Nissan, Toyota, Honda and Ford, have been forced to temporarily close their operations in China.

Major planemakers are also being forced to close plants in China as they respond to the spread of the virus.

Airbus has extended the shutdown of its factory in Tianjin, near Beijing beyond the Lunar New Year holiday.

Boeing, which had already stopped work on its crisis-hit 737 MAX in the eastern city of Zhoushan, said it would also delay the reopening of offices.

French group Safran, which makes helicopter engines and plane parts in China, has said it will keep its operations there closed until Monday.