Nissan to Cut Production 30% through 2020?
Nissan’s shrinking production plans are taking another hit.
The company has been grappling since May with cuts to bring its bloated capacity into line with realistic sales. But the coronavirus pandemic is forcing deeper reductions, sources tell Reuters.
Nissan began assembling a turnaround plan a year ago that initially envisioned shedding 12,500 jobs and shrinking worldwide capacity 10% by early 2023.
By February, CEO Makoto Uchida (Nissan’s third within 12 months), was conceding that both goals wouldn’t be enough. Reports suggested that another 4,300 salaried positions would be jettisoned.
Three months later, the company has reported its first full-fiscal-year loss in 11 years and was pondering ways to share capacity with its Renault and Mitsubishi Motors alliance partners. Media reports suggested the company would drop its 6-year-old Datsun entry-level brand and close two underutilized plants.
Now Nissan is heading for a 30% cut in production in April-December, sources tell Reuters. That would mean building 2.6 million vehicles over the nine months compared with 3.7 million in the same period last year.
In Nissan’s last fiscal year ended March 31, the company reported its global output fell 15% to 4.58 million units.
Reuters says Nissan made only 510,000 vehicles in April-June as COVID-19 pummeled markets worldwide. The company hopes to expand global output to 930,000 in the current quarter and 1.1 million in October-December. Those levels will be down 25% and 8%, respectively, from the same periods in 2019, Reuters estimates.
Nissan is in no rush to announce its sales targets for the current fiscal year, which will end next March 31. No wonder. Like its rivals, the company faces continuing uncertainty about how fast its major markets will revive.
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