Nissan's Shutdown of Its Key Plant in Mexico Could Offer China a Ready-Made Advantage | Carscoops

      Nissan is set to shut down its Civac plant in Mexico by 2027, as reported recently. The production of the Navara and Latin Frontier trucks will be shifted to another facility in Mexico. The existing skilled workforce and infrastructure at Civac may attract Chinese automakers.

      The Japanese manufacturer is facing significant financial difficulties, compounded by the impact of tariffs imposed during President Trump's administration. As a result, they are reportedly closing the Civac plant, which has been their first manufacturing site outside Japan for nearly 60 years.

      As per Auto News, the Civac facility currently produces the Navara pickup and the Frontier truck for Latin America, but both will be relocated to the Aguascalientes plant in Mexico. The Civac site is expected to cease operations by March 2027, with a projected output of only 57,000 vehicles this year—approximately a fifth of its previous production levels from less than a decade ago. Nissan has not yet made an official announcement regarding the closure.

      Changes in Production Plans and Anticipated Reductions

      The transition of truck production to Aguascalientes is viable due to Nissan’s decision to discontinue the Versa and likely terminate a joint venture with Mercedes relying on the facility. The production of the Infiniti QX50 and QX55 will end this year, while the related Mercedes GLB and the joint venture with Nissan and Benz are expected to be phased out early next year.

      Nissan is striving to reduce costs amidst declining sales and accumulating losses. The imposition of a 30 percent tariff on goods imported into the U.S. from Mexico has rendered manufacturing in Mexico impractical. The Civac plant is not the only one facing closure; Nissan plans to shut down six other facilities worldwide by 2027, including its historic plant in Oppama, Japan, which opened in 1961. However, its U.S. plants will continue operations.

      As reported by Auto News, Nissan finds itself in a precarious position since a significant portion of its North American sales derives from Mexico. Layoffs of thousands of workers could harm Nissan's reputation in the local market. Nevertheless, employees at the underutilized Civac facility may soon find new opportunities. A Chinese brand aiming to establish itself in North America might see the potential for utilizing the skilled workforce and existing cost-effective infrastructure of the plant.

      Seeking Partnerships in an Evolving Industry

      Alongside plant closures to cut costs, Nissan continues to seek a partner after unsuccessful merger discussions with Honda, which reportedly faltered due to Honda’s perception of it as a takeover. Nonetheless, it appears that the two companies have not entirely severed connections, as they plan to collaborate on developing software that could be integrated into vehicles from both brands by the end of the decade.