Nissan’s Largest Local Plant Cuts Production Drastically, Japanese Cars At A ‘crossroads’?

Into 2024, Japanese car enterprises were exposed to cut production news more and more frequently.

       On July 30th, Gai Shi automobile was informed that, following the reduction of production capacity in China, Nissan’s largest local plant also significantly reduced production. This means that, for Nissan alone, its sales of cold market scope has been not only limited to the Chinese market. Focusing on Japan’s main head of the car enterprise, in the automotive new energy transformation of the ‘crossroads’, these traditional enterprises are facing unprecedented challenges and critical choices. And the reason for this, and Chinese car companies and the Chinese auto market has a lot to do.

       According to the media, citing sources familiar with the matter, because of the old models in the U.S. market demand is weak, Nissan plans to be located in southwestern Japan’s Kyushu plant production reduced by one-third this month, to less than 25,000 units. Nissan has a backlog of 2023 Rogue models for sale in the U.S. market, and the introduction of the 2024 model has made the cars increasingly difficult to sell, a person familiar with the matter said. To clear the inventory of 2023 models, Nissan has had to offer incentives while remaining cautious about the rollout of the more lucrative 2024 model. Specifically, Nissan expects to build about 10,000 Rogue crossovers at its Kyushu plant for export, a figure that is half of this month’s planned production.

What does this mean for Nissan?
      It’s been reported that the U.S. and China are currently Nissan’s two largest markets, and the rise of strong emerging rivals like BYD in China could mean that Nissan will end up relying more on the U.S. market as the Chinese market outlook ‘shrinks’. For now, Nissan’s growth prospects remain a bit bleak after it ‘retreated’ to the US market. Nissan reported that the company’s second-quarter profit this year, ‘almost completely disappeared’, but also lowered its full-year performance expectations. It’s worth noting that sales are not just Nissan’s, but also Toyota and Honda’s. On 26 July, Honda China announced that its joint venture companies, Guangzhou Honda and Dongfeng Honda, will close their fourth and second production lines in October and November, respectively, to reduce production capacity by a total of 290,000 units. After the adjustment Honda’s total car production capacity in China from 1.49 million units to 1.2 million units, capacity shrinkage by one-fifth.

        In fact, has always been in the Japanese car to the process of globalisation, ‘group warming’ seems to be their familiar strategy. Toyota, Honda, Nissan and other giants, although the surface seems to work separately, but at a deeper level, they are closely linked through the consortium of this special form of organisation, to jointly resist external challenges. Recently, Mitsubishi Motors to join Honda and Nissan Motor Coalition, a coalition of three companies will complete the restructuring in Japan, and strive to survive through huge investments. It is reported that the three car companies sales of about 8.33 million units, plus the scale of 16 million units of the Toyota Alliance, Japan’s domestic automotive industry will form two camps, marking the restructuring of Japanese car companies close to the end. Unlike in the past, the restructuring of Japanese car companies is the pattern of duel between manufacturers, this time to promote the restructuring of the Chinese electric car manufacturers as the representative of the new energy era of the rise of emerging forces. As Singapore’s Lianhe Zaobao commented, the cooperation between Nissan, Honda and Mitsubishi can help Japanese car companies to cut costs and strengthen the strength to cope with China’s BYD and the United States, such as Tesla, in the field of electric vehicles in the fierce competition. It is worth mentioning that, as the Japanese car companies ‘big brother’, Toyota chose to embrace the warmth of the object has obvious differences. This time, Toyota chose to join China’s new energy ‘champion’ – BYD in its own auto industry partners.