Nissan may shut factories
Nissan Motor Corp is looking to close two plants in Japan’s Kanagawa prefecture and restructure five overseas factories by fiscal-year 2027 as part of its bid to turn its business around, according to media reports.
In Japan, the company is preparing plans to shut its Oppama plant in Yokosuka, pictured, and the Shonan plant of its subsidiary Nissan Shatai Co in Hiratsuka. Overseas, the company is considering production cuts at five plants in Mexico and three other countries.
The manufacturer intends to expedite efforts to improve its business performance by massively overhauling its production bases, reported The Yomiuri newspaper on May 17 based on information from its sources.
If Nissan shuts its main production plant, it will be the first such closure since the Murayama plant in Tokyo in 2001. Overseas, it is considering ending vehicle production in South Africa, India and Argentina, and closing two plants in Mexico.
In 1999 plan, a large-scale restructuring initiative undertaken under the leadership of former president Carlos Ghosn, five factories – including parts manufacturing plants – were shut.
Under the presently envisaged plan, it is considering not only closing seven automotive assembly plants but also reorganisng plants that make components.
The Oppama plant began its operation in 1961. It’s known as Nissan’s flagship production base where it became one of the world’s first companies to start mass production of EVs.
It has an annual production capacity of 240,000 units and produces the Note, a compact car model. It employed about 3,900 workers as of the end of October 2024.
The Shonan plant, which produces commercial vans, has an annual capacity of 150,000 units and employs about 1,200 workers.
Nissan has three other automotive assembly plants in Japan – one in Tochigi prefecture and two others in Fukuoka prefecture.
While the company is struggling with sluggish global sales, its excess production capacity is a drag on its operations. Although it has an annual production capacity of about 1.2 million units in Japan, it produced only about 640,000n 2024.
According to research agency MarkLines Co, the operating rates of Oppama and Shonan plants stood at about 40 per cent in fiscal-year 2024, far below the widely believed break-even point of 70-80 per cent.
Japan’s third-biggest automaker unveiled sweeping new cost cuts early last week, saying it would reduce its workforce by around 15 per cent and cut production plants to 10 from 17 globally as it seeks to push through a turnaround.
The Yomiuri newspaper, which first reported the carmaker’s possible closing of plants in Japan and overseas, says two factories in Mexico are also under consideration.
Nissan says in statement on its website that reports on the potential closure of certain plants are speculative and not based on any official information of the company.
“At this time, we will not be providing further comments on this matter,” Nissan adds. “We are committed to maintaining transparency with our stakeholders and will communicate any relevant updates as necessary.”
The more aggressive turnaround steps unveiled by new CEO Ivan Espinosa mark a sharp break with Nissan’s strategy under his predecessor Makoto Uchida, who had high hopes of expanding global production and refused to close domestic plants.
In its statement on May 16, Nissan said it had previously announced it would consolidate production of Nissan Frontier and Navara pick-ups from Mexico and Argentina into a single production hub centralised around the Civac plant in Mexico.
It also said it had stated in March that alliance partner Renault would buy out its stake in its joint Indian business, Renault Nissan Automotive India Private Ltd.
