Huge Losses! Auto Giant Officially Closes Plants
On July 15, Nissan announced that it will halt vehicle production at its Chikuhama plant by the end of fiscal year 2027 and shift operations to its Kyushu plant in Fukuoka Prefecture in southern Japan as part of the company's global restructuring plan to cut capacity.
In the 1960s, when the Japanese automobile industry was in a stage of rapid development, Nissan decided to build the Chihama Plant in Yokosuka City, Kanagawa Prefecture, in order to expand the scale of its production and enhance its competitiveness in the marketplace. 1961 saw the completion of the construction and operation of the Chihama Plant, which was one of the first large-scale automobile factories in Japan, and also Japan's first passenger car factory, marking an important step in Nissan's advancement into the international marketplace. The plant assumed important production tasks for Nissan in its early years of operation, and was also home to the Central Research Laboratory and the Opama Proving Ground, a comprehensive base for research and development, testing, and production, and began production of the Bluebird model.
In 1964, Nissan took over the Japanese automobile company “Prince Motors”, and since then, based on the R&D and production capacity of the Oppama plant, it has improved and innovated some of its models, laying the foundation for the development of subsequent models. 1978, the total number of vehicles produced at the Oppama plant reached 50 million. In 2003, the Opama plant began production of the Cube model, which further enriched the plant's product lineup. 2010 saw the Opama plant become the first Nissan plant to begin production of the Leaf electric vehicle, the world's first mass-produced electric vehicle, and the Juke model, marking the plant's leadership in the electric vehicle segment and its continued diversification of its model lineup. 2012 saw the Opama plant begin production of the Sylphy model, further expanding the plant's share of the mainstream passenger car market.In 2016, the Opama Plant became the first Nissan plant to begin production of the Note e-power model.In 2018, the Opama Plant began production of the Nissan Leaf e+, further diversifying the electric vehicle lineup. In terms of development, the Opama Plant has a historically significant role for Nissan and the Japanese automotive industry, being the first passenger car plant in Japan and the first base to produce electric vehicles in Japan, with a history of 64 years.
On July 15, the relevant person in charge of Nissan China said: "Nissan plans to transfer and integrate the vehicle production of the Chihama plant to the Kyushu plant in Fukuoka Prefecture, Japan by the end of the 2027 fiscal year (i.e., March 31, 2028). This initiative will give a strong impetus to Nissan to build a more resilient and responsive global manufacturing layout.
In recent years, Nissan has implemented a global restructuring plan with plans to cut capacity and consolidate production sites due to declining sales in key markets such as the U.S. and China, as well as debt pressure and an aging product line. The Opama plant, which is facing closure due to low operating rates, currently produces only Note and Note Aura compact vehicles. In the future, the Opama plant will be closed and the production line will be transferred to its plant in Fukuoka Prefecture in southern Japan.
On May 13, Nissan released its fiscal year 2024 results. The data show that Nissan Motor's consolidated net sales for fiscal year 2024 were 12.6 trillion yen, a year-on-year decline of 0.4%; operating profit was 69.8 billion yen, a year-on-year decline of 87.7%; the net loss was 670.9 billion yen, a change from profit to loss, and the net profit for the same period was 426.6 billion yen, a year-on-year decline of 257.3%; the financial report shows that, due to the effect of intensified competition for sales, Nissan Motor's fiscal year 2024 Global sales of 3,346,000, operating profit margin of 0.6%, automotive net cash of 1.498 trillion yen
At the earnings meeting, newly appointed Nissan CEO Ivan Espinosa unveiled the Re:Nissan plan - a three-year revitalization plan aimed at reinvigorating Nissan, with a core focus on cost-cutting, in the hope that Nissan will complete its self-salvation through internal reforms. Among other things, Nissan plans to increase the number of layoffs to 20,000 by fiscal year 2027 (April 2027 to March 2028), equivalent to 15% of the total global workforce, including direct and indirect employees in global production, management, and research and development. In addition, Nissan plans to reduce the number of global plants from 17 to 10, while it will streamline its powertrain plants and accelerate job reforms.
In response to the layoffs and plant reductions, Nissan's President and Chief Executive Officer, Ivan Espinosa, said, "In the face of challenging FY 2024 results and rising variable costs, coupled with an uncertain environment, we must prioritize self-improvement with greater urgency and speed to achieve profitability that is less dependent on volume. As new management, we are taking a measured approach to reassessing our objectives and are actively pursuing all possible opportunities to implement and secure a strong recovery. The goal is to return to profitability in fiscal 2026.
