Japanese automaker, Nissan is considering plans to shut car assembly plants in Japan and overseas factories, including in Mexico as part of a cost-cutting plan the company flagged earlier this week.
Have you read; Japaul to raise ₦500 billion capital for gold mines development and acquisition
Reuters reported that the automaker is mulling closing Japan’s Oppama plant. where Nissan started production in 1961, and the Shonan plant operated by Nissan Shatai, in which Nissan is a 50%. citing unnamed sources. The closures would leave Nissan with just three vehicle assembly plants in Japan.
The domestic plant closures would mark Nissan’s first since closing its Murayama factory in 2001.
Keeping just three home plants open – its Tochigi factory and the Nissan Motor Kyushu and Nissan Shatai Kyushu plants in southern Fukuoka prefecture – would be more than enough to service the domestic market and maintain exports from Japan, one source said.
The Oppama plant has annual capacity of around 240,000 cars and employed about 3,900 workers as of end-October. In 2010, it became Nissan’s first plant to start producing the Leaf, widely considered the world’s first mass-market electric vehicle.
The Shonan plant, which produces commercial vans, has an annual capacity of around 150,000 units and employs about 1,200 people.
Outside Japan, Nissan is considering ending production at plants in South Africa, India and Argentina. and also cutting the number of factories in Mexico.
Nissan, Japan’s third-biggest automaker on Tuesday unveiled sweeping new cost cuts, saying it would reduce its workforce by around 15% and cut production plants from 17 to 10 globally as it seeks to push through a turnaround.
The Company aims to reduce its workforce by a total of 20,000 employees between fiscal years 2024 and 2027, which includes the previously announced reduction of 9,000. This workforce reduction globally will cover direct/ indirect roles and contractual roles in manufacturing, SG&A and R&D functions. Additionally, the Company will implement further measures under SG&A, including expanding the scope of shared services and identifying efficiencies in marketing.
The automaker’s fiscal 2024 sales stood at 3.3 million vehicles, down 42% since the 2017 business year.
In its statement on Saturday, Nissan said it had previously announced it would consolidate production of Nissan Frontier and Navara pickups from Mexico and Argentina into a single production hub centralised around the Civac plant in Mexico.
It also said that it had announced in March that French alliance partner Renault would buy out its stake in their joint Indian business, Renault Nissan Automotive India Private Ltd (RNAIPL).
Nnamdi Maduakor is a Writer, Investor and Entrepreneur
