AUTONEWS

Nissan considering closing plants in Japan, abroad

Nissan is considering plans to close two car plants in Japan and overseas plants, including one in Mexico, sources said on Saturday, as part of a cost-cutting plan the company announced earlier this week.

The automaker is considering closing its Oppama plant in Japan, where Nissan began production in 1961, and the Shonan plant operated by Nissan Shatai, in which Nissan has a 50% stake, the sources told Reuters, leaving it with just three assembly plants in Japan.

Overseas, Nissan is considering halting production at plants in South Africa, India and Argentina and reducing the number of plants in Mexico, one of the sources said.

Japan’s third-largest automaker recently unveiled sweeping new cost cuts, saying it would cut its workforce by about 15% and reduce production facilities to 10 from 17 globally as it seeks to turn around the company.

The Yomiuri newspaper, which first reported the possible closures of Nissan plants in Japan and abroad, said two plants in Mexico were under consideration.

Nissan said in a statement that reports of potential plant closures were speculative and not based on official company information.

“We will not be making any further comment on this matter at this time,” Nissan said in a statement. “We are committed to maintaining transparency and will communicate any relevant updates as necessary.”

The more aggressive turnaround steps outlined by new CEO Ivan Espinosa mark a sharp break with Nissan’s strategy under his predecessor Makoto Uchida, who had high hopes for expanding global production and refused to close domestic plants.

The automaker's sales in fiscal 2024 were 3.3 million vehicles, down 42% from fiscal 2017.

In a statement on Saturday, Nissan said it had previously announced it would consolidate production of the Nissan Frontier and Navara pickup trucks from Mexico and Argentina into a single manufacturing site centered around the Civac plant in Mexico.

It also noted that in March, it announced that French alliance partner Renault would buy out its stake in their joint Indian operation, Renault Nissan Automotive India Private Ltd (RNAIPL).

The domestic plant closure would be Nissan's first since the closure of its Murayama plant in 2001.

Nissan boss admits what went wrong...The first task for the new CEO of Nissan is to start turning around the struggling company. That's why he has been making drastic decisions from the start: cutting 20,000 jobs, closing seven factories, eliminating six platforms, reducing the complexity of parts by 70 percent and halting the development of certain models. These are just the main points of a long list of cost-cutting measures. But how did the Japanese automaker get to this point, when everything seemed almost perfect just a few years ago?

Speaking at the Financial Times Summit on the Future of Cars, Nissan boss Ivan Espinosa said that the first problems emerged about a decade ago when Nissan set an overly optimistic goal of selling eight million vehicles a year. That's a far cry from where the company is now. Deliveries amounted to just 3.3 million cars in Japan's fiscal year 2024, which began on April 1, 2024, and ended on March 31 of this year, according to Jutarnji.hr.

Motor Trend quotes Espinosa as saying that Nissan has poured a lot of money into increasing production capacity and expanding its workforce to meet what has turned out to be a megalomaniacal sales target. The plans were made under Carlos Ghosn, the same man who recently described Nissan as a company in a “desperate situation,” blaming the management team that succeeded him for being slow to act.

Nissan’s new boss claims that the “fundamental problem” has deepened over the years because “no one has done anything to fix it.” The new measures announced this week are part of the “Re:Nissan” cost-cutting plan, after the company reported a loss of 4 billion euros in its last fiscal year.

“Let me start by explaining why we are here. This has not happened in the last few years. It is more of a problem that probably started in 2015, when management thought this company could reach annual global vehicle sales of around eight million. There has been a lot of investment in both planned capacity and in human resources, but the reality today is that we are operating at about half that volume. And no one has done anything to fix it so far,” said Ivan Espinosa.

Asked whether Nissan has what it takes to recover, he said: “We are very confident in the plan and we will push it forward.” The cost-cutting strategy also includes strengthening ties with Renault and Mitsubishi. Nissan is also working more closely with its Chinese ally Dongfeng and has not ruled out allowing Dengfeng to build cars at Nissan’s Sunderland plant. The underutilized UK plant is not among the seven sites that are set to close.

Cutting costs and creating alliances will not be enough to save Nissan, however. It needs new products, and they are on the way. The next-generation Micra, which will be a rebadged Renault 5, is coming to Europe, and will be joined by the electric Juke and Qashqai equipped with the next-generation E-Power system. In Japan, Nissan will introduce a new kei car, a next-generation large van with E-Power powertrain, and an all-new Skyline. More new products are also planned for India, Oceania, Africa, and Latin America. The biggest news is expected for North America. More than 10 new models are planned there, starting with the new Leaf, the next-generation Sentra, and the plug-in hybrid Rogue (X-Trail in Europe) based on the Mitsubishi Outlander.

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