Nissan is going to reduce annual production by 1 million cars

Nissan is going to reduce annual production by 1 million cars

April 12, 2020 0 By autotimesnews

Nissan management believes that for the survival of the company it is necessary to move to a more radical reduction in production capacity and staff. Several sources told Reuters that in May, the company will announce a reduction in planned annual sales of 1 million cars.

Even before coronavirus spread, Nissan’s sales and profits plummeted. This forced the manufacturer to abandon the course of aggressive expansion, which for many years was conducted by former head Carlos Ghosn. The pandemic was another blow to the company, which is no longer able to put off decisive measures.

“Over the years, Nissan has sought to achieve annual sales of around seven to eight million cars. But the company never managed to sell more than five million or so, one source said to Reuters. – Nissan can no longer adhere to such thinking. On the agenda is the issue of reducing plans, it will have a significant impact on activities in 2020-2022 ”. A third senior source at Nissan said the figure could be even lower than five million, given the impact of the virus, which has plummeted global demand for cars. The best year for Nissan was 2017, when 5.77 million cars were sold.

In July 2019, Nissan announced its intention to reduce annual global production capacity to about 6.5 million cars. A decrease in the planned sales volume of 1 million will mean the closure of another three or four assembly plants and the reduction of thousands of jobs in addition to the already announced plans to optimize the workforce by 10%. The same measures will have to resort to component suppliers and dealers.

The precarious situation of the Japanese automaker became noticeable back in 2019. The company announced its intention to lay off about 10,000 employees. In an attempt to overcome the crisis, Nissan was going to sell a subsidiary of Nissan Trading, which supplies spare parts and materials to the secondary market. All this happens against the background of falling car sales in China and Europe, as well as the crisis situation of management. In January 2020, the former head of Renault-Nissan, Carlos Ghosn, suggested that Nissan would go bankrupt in two to three years.