Nissan plans cuts as China demand decelerates
World’s top market set to show first fall since 1990
Japan’s automaker Nissan Motor Co will produce 30,000 fewer vehicles in China in the coming months than planned, a person briefed on the matter told Reuters, as global automakers grapple with falling demand in the world’s biggest car market.
After Ford Motor Co and Hyundai Motor Co, Nissan becomes the latest automaker to cut production in the country, where slowing economic growth and a crippling trade war with the US have hit vehicle sales in the past few months.
Nissan plans to cut production in China by 30,000 units during the December-February period from its initial output plans, said the person, who declined to be identified as the plans are not public.
Automakers set initial plans on how many vehicles to produce at each of their plants. These plans can be modified due to demand, supply chain issues and other factors. It was not known how much Nissan had planned to produce in the threemonth period.
The automaker produced nearly 400,000 units in China during the three-month period ended in February this year.
The period covered the first two months of the year, when sales usually slow in the run-up to the Lunar New Year holidays.
Japan’s Nikkei business daily reported late on Thursday that Nissan plans to cut production at three plants in China, including one in Dalian, Northeast China’s Liaoning Province, where it produces the popular Qashqai and Infiniti QX50 SUV crossover models, and in Zhengzhou, capital of Central China’s Henan Province, where it makes the X-Trail SUV crossover, one of its top-selling models, and Venucia brand models – a no-frills local Nissan brand in China.
A Nissan spokeswoman in Beijing declined to comment on future production plans.
China is Nissan’s second-largest market, accounting for about onequarter of its annual global vehicle sales. It sold 1.5 million vehicles in China in 2017, and earlier last year said it planned to boost sales to 2.6 million units by 2022, making China its biggest market in terms of sales.
Nissan and its Chinese jointventure partner Dongfeng Group intended to invest roughly $900 million for the envisioned manufacturing capacity expansion over the next few years, according to a person close to the plan. That would boost Nissan’s vehicle production capacity in China to as many as 2.1 million vehicles a year, Reuters reported in August.
Nissan in February 2018 outlined a five-year plan, dubbed “Triple One,” to increase its market share in China by focusing on electric cars and the Venucia, two market segments expected to see a surge in demand. It also said it would aim to boost sales of light commercial vans and trucks.
End of a boom
But a stretch of booming demand for cars in China seems to have come to an end, with the market on track to post a fall in annual sales in 2018 for the first time since at least 1990.
Nissan’s group sales in China rose 3.9 percent in the January-November period in 2018, slowing from a 12 percent jump a year earlier.
A slowdown in the major market comes as the Japanese automaker is grappling with a scandal involving alleged financial misconduct of Carlos Ghosn, leading to his arrest and subsequent ouster as chairman, and straining ties with France-based partner Renault SA.
Main: A view of the Nissan Crossing showroom in Tokyo in November 2018 Inset: The Nissan LEAF NISMO RC, an electric race car, is displayed at the Nissan Crossing showroom in Tokyo in November 2018.