| 2:13 PM EST

Nissan to Slash Production 78% in Japan

Slumping sales prompt two-month cutback
#asia #Mitsubishi #Renault

Share

Facebook Share Icon LinkedIn Share Icon Twitter Share Icon Share by EMail icon Print Icon

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.

Not Alone

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.

Somber Outlook

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.

RELATED CONTENT

  • Nio Plant Venture Lands $1.5 Billion Investment

    Chinese electric-car startup Nio Inc. is forming a manufacturing joint venture with Beijing E-Town International Investment and Development Co., which is investing 10 billion yuan ($1.5 billion) in the business.

  • Welding Mixed Materials, Multiple Ways

    As OEMs and suppliers seek lightweight solutions to meet higher fuel economy standards through multi-material structures, conventional welding techniques are beginning to give way to new solid-state joining methods better suited for creating strong bonds between dissimilar metals.

  • 48-volt Is On Its Way

    If you have any question about the almost certain inevitability of 48-volt electrical architecture in vehicles to facilitate the creation of mild hybrids for fuel economy and the utilization of electric superchargers for improved performance, then the number of companies that are pursuing these technologies ought to be an answer.