Nissan Motor’s Global Production Capacity: Promoting Selection and Concentration to Reduce Capacity by 20%

In Nissan Motor’s business structural reform plan, announced in May 2020, the automaker has introduced a plan to reduce its global production capacity by about 20% from 7.2 million units in 2018 to 5.4 million units (one shift). However, it will be able to produce up to about 6 million units when demand recovers. By reducing production capacity, Nissan aims to promote efficiency and maintain a global factory utilization rate of at least 80%.

Production capacity reduction will be implemented by closing some plants and reducing the number of production lines. In addition to ending vehicle production at the Indonesia plant in February 2020, Nissan has decided to close the Barcelona plant in Spain by the end of 2021. The Spanish base was initially scheduled to close in 2020, but the closure was postponed due to delays in coordination. Further factory closures and reduction of production lines have not been clarified. While capacity is planned to be lowered by about 1.2 million units, it has been only reduced by 450,000 units so far. Meanwhile, capacity in China, which is a priority market for Nissan, a new plant in Changzhou started operation in November 2020, and another plant is scheduled to be launched in Wuhan by the end of 2021. Nissan intends to promote selection and concentration. It is likely that production reorganization will take place in countries where the utilization rate is low. In the UK, where future production operations were uncertain due to Brexit, Nissan announced in July 2021 that it will produce a new crossover SUV. In anticipation of increasing demand for BEVs, Nissan will enhance its battery supply system. The automaker has announced that it will set up its first large-scale production plant of EV batteries in Europe adjacent to the Sunderland plant in the UK. The UK base is expected to be a key base of Nissan’s Battery Alliance initiative.