By Maki Shiraki and Daniel Leussink
TOKYO (Reuters) -Nissan is considering plans to shut two car assembly plants in Japan and overseas factories, including in Mexico, sources said on Saturday, as part of a cost-cutting plan the company flagged earlier this week.
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% stakeholder, the sources said, which would leave it with just three vehicle assembly plants in Japan.
Overseas, Nissan is considering ending production at plants in South Africa, India and Argentina, and cutting the number of factories in Mexico, one of the sources said.
Japan’s third-biggest automaker unveiled sweeping new cost cuts on Tuesday, saying it would reduce its workforce by around 15% and cut production plants to 10 from 17 globally as it seeks to push through a turnaround.
The Yomiuri newspaper, which first reported the automakers’ possible closing of plants in Japan and overseas, said two factories in Mexico are under consideration.
Nissan said in a statement on its website that reports on the potential closure of certain plants were speculative and not based on any official information of the company.
“At this time, we will not be providing further comments on this matter,” Nissan said in the statement. “We are committed to maintaining transparency with our stakeholders and will communicate any relevant updates as necessary.”
The more aggressive turnaround steps unveiled by new CEO Ivan Espinosa mark a sharp break with Nissan’s strategy under his predecessor Makoto Uchida, who had high hopes of expanding global production and had refused to close domestic plants.
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).
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.
(Reporting by Maki Shiraki and Daniel Leussink; Editing by Chris Reese, Sandra Maler, Sam Holmes and Sonali Paul)
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