Nissan to Slash Production 78% in Japan
Nissan Motor just can’t get a break.
The company, whose sales fell 8% last year, was bracing for further erosion even before the coronavirus pandemic hit.
Now Nissan plans to cut domestic production 78% in May and 70% in June, says Reuters, which cites internal production documents. The reductions will slash output to a meager 13,400 vehicles next month and 33,700 in June.
Image: Nissan Motor Co.
Of course, Nissan isn’t alone in dialing back production because sales have dried up during the pandemic. But the company has been on a sharp downward spiral for more than a year.
Last year, Nissan began cutting costs by laying off employees, trimming its product lineup and looking for ways to shed overcapacity. Every move is complicated by its deeply integrated, 21-year-old alliance with Renault. The French company is battling its own weakening sales and financial strength, and neither can make big operational changes without affecting the other.
Cuts in Production, Office Staffs
Three weeks ago, the pandemic prompted Nissan to idle its assembly plant in Tochigi through May and begin one-shift operations at Kyushu over the same period. Nissan’s Oppama plant will continue sporadic shutdowns that began early this month, Reuters says.
Earlier today Nissan announced that it has shut down its global headquarters in Yokohoma and unspecified non-production facilities in Atsugi, Oppama and Tochigi. The action will affect 15,000 employees.
Cutbacks also are underway at Mitsubishi Motors, in which Nissan holds a controlling 34% stake. Reuters says MMC, which joined the Renault-Nissan alliance in 2017, aims to lower its domestic production by one-third through June because of shrinking demand.
Nissan’s cutbacks are a prelude to a revised belt-tightening plan due next month. Earlier reports said the company believes its global sales won’t top 5 million units (down from 5.2 million in 2019) for at least three years, regardless of the pandemic.
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