AAA weekly


Nissan Motor’s New Procurement Strategy

In May 2020, Japanese automaker Nissan Motor announced its business structural reform plan “Nissan Next.” According to the plan, Nissan will reduce its global production capacity from 7.2 million units as of 2018 to a normal operation of 5.4 million units, setting maximum capacity at up to 6 million units. In addition, the Renault-Nissan-Mitsubishi Alliance’s efforts prior to the announcement of the medium-term plan showed that segments and regions will be led by specific manufacturers. Nissan is said to lead the alliance in North America, China and Japan in terms of regions, and the C segment, D segment, electric vehicle and sports models in terms of products. While procurement in these regions and for these products are expected to increase, Nissan will close factories in Indonesia and Spain, forcing suppliers whose primary client is Nissan to change their business policies. As the alliance deepens, mutual use of factories among alliance members is expected to progress in the future. For this reason, for example, when a Renault model is produced at a Nissan plant, there will be more opportunities for suppliers who deliver to Nissan and produce in nearby areas to deliver to Renault.

Nissan Motor: Medium-term Management Policy “Nissan Next” and Its Impact on Procurement (Announced in May 2020)

Medium-term Management Policy Impact on Suppliers and Procurement
・According to Nissan Motor’s medium-term management policy “Nissan Next,” announced in May 2020, global production capacity is planned to be reduced by 20% from 7.2 million units as of FY 2018 to a maximum capacity of 6 million units (normal operation of 5.4 million units). – Along with this plan, the factory in Indonesia will be closed. Production in the ASEAN region will be concentrated in Thailand. – The factory in Barcelona, Spain is scheduled to be closed at the end of 2021. The factory in Sunderland, UK will continue production. – Factories in North America will be optimized. Production will be consolidated by segment and platform.

Nissan Motor

・At the announcement of the mid-term plan in May 2020, Nissan apologized to its suppliers for putting extra burden on them. The apology came after the automaker set an ambitious unit target and asked its suppliers to cooperate, including engaging in overseas expansion, but Nissan failed to meet its target.


・Marelli has set up a plant in Spain in line with Nissan’s production plan. As of July 2020, it was under consideration to close the factory, if the supplier cannot find customers other than Nissan.


・Workforce at the factory in the UK is planned to be reduced in FY 2020. It appears that Nissan withdrew its production plan for the next X-Trail in the UK. Brexit The uncertainty that came with Brexit negatively impacted business operations. ・In the United States, FALTEC has decided to withdraw from the production of car carpets by November 2019. Production was halted as of November 2020.


・As of November 2019, the Alabama plant in the US planned to reduce the number of shifts from two to one. ・As of November 2019, a one-shift system was planned to be introduced in Indonesia. – The measures are the same as the ones introduced at the time of the Lehman Shock and the introduction of the Nissan Revival Plan.

Kasai Kogyo

・Kasai Kogyo was considering closing two of its five plants in North America as of November 2019. In ASEAN, the company is strengthening business tie-up with Mitsubishi and Toyota.
・The product lineup will be reduced. By 2023, the number of models will be reduced by about 20% from 69 models to 55 models or less. – Regional models will be minimized. – Emphasis will be given to C segment, D segment, electric vehicle and sports models. ・Suppliers that entered markets with the start of production of the Datsun brand will be forced to withdraw or search for new customers. In Indonesia, Kasai Kogyo and Unipress set up operations in line with the local production start of the Datsun.
・Nissan will utilize alliance leader/follower scheme. – Regionally, Nissan will be a leader in North America, China and Japan. – Technically, Nissan will be a leader in driving assistance technology, connected car technology for China, and electric vehicles. ・It is expected that alliance partners will use each other’s factories. For this reason, for example, when a Renault model is produced at a Nissan plant, there will be more opportunities for suppliers who deliver to Nissan and produce in nearby areas to deliver to Renault. In the opposite case, Nissan may switch to procurement from Renault’s suppliers.
・Nissan will promote electrification. – e-POWER technology will be introduced to the Band C segments on the global market. – Nissan will improve electrification rate to 60% in Japan, to 23% in China and to 50% in Europe. – Nissan aims to sell more than 1 million vehicles equipped with electrification technology annually by FY 2023. ・In June 2020, China’s Sunwoda Electric Vehicle Battery agreed to consider joint development of next-generation batteries for Nissan’s e-POWER technology. – The two companies will consider cooperating in the development of production technology for the stable supply of the jointly developed in-vehicle batteries. – It is said that details and conditions of joint development will be discussed and a final agreement will be reached by the end of 2020. – Until now, Panasonic has supplied batteries for the e-POWER, but Nissan will also procure batteries from Sunwoda Electric Vehicle Battery. : Nissan’s aim is to expand the number of battery suppliers, creating a system that enables stable supply.
(Created using company PR materials and various media sources)
Please log in or subscribe to AAA weekly to view the rest of this report.
Free trial subscriptions are available!