Nis­san plans cuts as China de­mand de­cel­er­ates

World’s top mar­ket set to show first fall since 1990

Global Times - Weekend - - AUTO - Reuters – Global Times

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.

Pro­duc­tion cuts

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.

Photo: IC Photo: VCG

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.

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