Nissan's Crisis in China Worsens as Wuhan Facility Braces for Shutdown | Carscoops
Nissan is set to announce a net loss exceeding $5 billion for the previous fiscal year and is urgently attempting to reduce expenses.
The automaker is on the verge of reporting its most significant financial loss ever this month, as it continues to face intense competition from Chinese electric vehicle manufacturers. Last year, Nissan had to close another struggling production plant in China.
Reports indicate that Nissan plans to halt production at its Wuhan plant due to declining output of the Ariya and X-Trail models manufactured there. This comes on the heels of news that Nissan is preparing for a historic financial setback.
Initial reports of Nissan's strategy originated from a local Chinese news source. The plant has only managed to produce 10,000 units annually since it opened in 2022, which is particularly disappointing given its capability to produce up to 300,000 vehicles each year. Nissan is leasing the facility from Dongfeng Motor.
Nissan’s Chinese Sales Fell Short of Expectations
As per Reuters, cutthroat competition from local automakers has significantly contributed to Nissan’s disappointing figures. Domestic brands have advanced, leaving foreign companies like Nissan struggling to catch up.
This isn’t the only Nissan facility in China facing significant challenges. In June of last year, the company shut down its Changzhou plant due to the rise in sales of Chinese electric vehicles and decreasing demand for imports. This site had been functioning alongside Dongfeng Motor since November 2020 and had an annual production capacity of 130,000 vehicles.
Nissan is Facing Major Challenges
Currently, Nissan finds itself in a precarious situation. It’s just months since its proposed merger with Honda fell through, and on May 13, it is set to publish its complete earnings report for the fiscal year concluded in March.
The outlook is bleak. Recently, Nissan projected a net loss ranging from ¥700 billion to ¥750 billion (approximately $4.91 billion to $5.26 billion), a significant increase from the initial estimate of ¥80 billion ($560 million).
Nissan is effectively in survival mode and is undertaking significant restructuring. It has confirmed plans to eliminate 9,000 jobs, shut down plants, and streamline its model offerings. Additionally, it is seeking a new partner and might consider collaborating with Taiwanese technology giant Foxconn.
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Nissan's Crisis in China Worsens as Wuhan Facility Braces for Shutdown | Carscoops
Nissan is anticipated to announce a net loss exceeding $5 billion for the previous fiscal year and is urgently seeking to reduce expenses.