by It is reported that Nissan is preparing to cease production at its plant in Wuhan due to reduced output of the Qashqai and X-Trail models manufactured there. This is bad news for the Japanese brand and comes just days after it was revealed that it will soon announce the largest financial loss in its history.
Reports of the plans first appeared in a local Chinese media outlet. It was noted with understanding that the plant’s annual production has amounted to only 10,000 units since it began operations in 2022. This is quite disastrous, especially considering that the plant has the capacity to produce up to 300,000 vehicles annually. Currently, Nissan leases the site from Dongfeng Motor.
Nissan’s Sales in China Fall Short of Plans
It is clear that fierce competition from Chinese companies is a key reason why production has never come close to the plant’s potential capacity.
Read:
This is not the only Nissan plant in China under serious pressure. In June of last year, it closed its plant in Changzhou due to rising sales of Chinese electric vehicles and declining demand for imported cars. This facility had been operating alongside Dongfeng Motor since November 2020 and had the capacity to produce 130,000 vehicles annually.
Nissan Is Caught Between a Rock and a Hard Place
Currently, Nissan is in a difficult position. Just a few months have passed since it … and on May 13, it is set to release its full earnings report for the fiscal year ending in March.
According to reports, the automaker expects to report a net loss of ¥700-750 billion ($4.91 – $5.26 billion) for the year, a massive increase compared to initial estimates of a net loss of ¥80 billion ($560 million).
Nissan is now in survival mode and implementing a large-scale restructuring. It has confirmed plans to cut 9,000 jobs, close plants, and streamline model lineups. It is also seeking a new partner and may even merge with a Taiwanese giant.
