Skidding Nissan to halt production at Japanese plant

Struggling auto giant Nissan said Tuesday it will stop production at its plant at Oppama in Japan at the end of its 2027 fiscal year.

Nissan posted a net loss of 671 billion yen ($4.5 billion) last year and it has said it will cut 15 percent of its global workforce.

"The company will cease vehicle production at the Oppama plant at the end of fiscal year 2027," Nissan said in a statement.

Production of the plant outside of Yokahama will be shifted to another existing factory on the southern Japanese island of Kyushu, it said.

One of Nissan's six domestic plants, Oppama exmployed around 3,900 people as of October 2024 and began operations in 1961, according to the company's website.

It was a "pioneer in the production of advanced vehicles, such as the Nissan LEAF, the world's first mass-market electric vehicle," it said.

The heavily indebted carmaker, whose mooted merger with Japanese rival Honda collapsed this year, is slashing production as part of its expensive business turnaround plan.

Nissan said in May it would "consolidate its vehicle production plants from 17 to 10 by fiscal year 2027".

Like many peers, Nissan is finding it difficult to compete against Chinese electric vehicle brands.

The merger with Honda had been seen as a potential lifeline but talks collapsed in February when the latter proposed making Nissan a subsidiary.

Nissan has faced numerous speed bumps in recent years -- including the 2018 arrest of former boss Carlos Ghosn, who later fled Japan concealed in an audio equipment box.

Ratings agencies have downgraded the firm to junk, with Moody's citing its "weak profitability" and "ageing model portfolio".

This year Nissan shelved plans, only recently agreed, to build a $1-billion battery plant in southern Japan owing to the tough "business environment".

Of Japan's major automakers, Nissan is seen as the most exposed to US President Donald Trump's 25-percent tariff imposed on imported Japanese vehicles earlier this year.

This is because its clientele has historically been more price-sensitive than that of its rivals, according to experts.

One potential solution for Nissan could be Taiwanese electronics behemoth Hon Hai, better known as Foxconn, which assembles iPhones and is expanding into cars.

Foxconn said in February it was open to buying Renault's stake in Nissan.

Source: AFP