Major automaker makes ‘tough but necessary decision’ to close seven overseas car plants – including its flagship factory

TROUBLED carmaker Nissan is set to close seven plants as part of a major cost-cutting and restructuring strategy.

Among them is the Japanese giant’s flagship Oppama plant, located southwest of Tokyo, which has been operational since 1961.

AFP

Nissan are preparing to close seven plants, including their flagship Oppama factory[/caption]

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The brand’s CEO, Ivan Espinosa, described the decision as ‘tough but necessary’[/caption]

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The Oppama factory employs some 4,000 workers and has produced more than 17.8 million vehicles to date[/caption]

Known as Nissan‘s “mother factory”, it employs nearly 4,000 workers and has produced more than 17.8 million vehicles to date – many of them the brand’s most iconic models.

The company has been racking up huge losses in recent times, due in part to slipping vehicle sales in China and elsewhere, as well as huge restructuring costs and ballooning inventories.

As a result, they’ve been forced to make several difficult decisions – including laying off staff, closing factories, and even musing with the idea of merging with rivals Honda.

The closure of their Oppama hub is the latest of them, and will see its vehicle production transferred to Nissan Motor Kyushu Co. Ltd. in Fukuoka Prefecture.

According to Car & Driver, the move will affect some 22,000 jobs in an overall plan that sees seven plants closed by fiscal year 2027.

Dubbed their ‘Re:Nissan’ recovery strategy, Nissan’s new CEO Ivan Espinosa – who succeeded Makoto Uchida in April following Uchida’s handling of the failed Honda merger – said: “Today, Nissan made a tough but necessary decision.

“It wasn’t easy – for me or for the company – but I believe it’s a vital step toward overcoming our current challenges and building a sustainable future.

“The Oppama plant is a proud part of our history, and its legacy will endure.”

Several nearby sites, including Nissan Research Center as well as the crash-test facility and the Oppama Wharf, will be kept.

“This transfer is expected to significantly reduce manufacturing costs in Japan, strengthen plant competitiveness, improve product profitability, and support Nissan’s long-term growth,” Nissan added.

Part of the announcement also revealed Nissan will aim to reduce the number of platforms it uses for its vehicles from 13 to seven over the next decade.

They will also be looking to cut engineering costs and reduce parts complexity by 70 percent.

It’s long been evident that Nissan has struggled to adapt to post-pandemic shifts in the auto industry and is now facing difficulties as a result of poor management decisions under former CEO Carlos Ghosn.

This culminated in the company posting a staggering $4.5 billion loss in the last fiscal year.

While cost-cutting measures are crucial, Nissan’s recovery also depends on launching new models, expanding its EV lineup and remaining relevant in global markets.

Recent successes, such as the redesign of major models – including the new Leaf model – offers hope but are not sufficient to address all revenue issues.

Espinosa added: “We recognize that this transition affects not only our employees, but also our partners and wider stakeholders who have supported the Oppama Plant for decades.

“That’s why we’ve begun immediate engagement with local government leaders, suppliers, and labor representatives.”

“I think in the short term, the focus that we have is to fix ourselves”

Ivan Espinosa, Nissan CEO

Espinosa recently opened up on the company’s shortcomings but also said he’s focusing on “fixing” the problems at hand to keep the company afloat.

He mentioned that while Nissan works to regain its footing among other giant automakers in the industry, his immediate goal is to focus on the present issue.

“I think in the short term, the focus that we have is to fix ourselves,” Espinosa told CNBC’s “Squawk Box Europe.”

“We are convinced that the plan is enough and robust,” he continued.

“The size of the task is big.

“Our landing was not good in 2024, and thus we have a transformation that has to come.

“But this is a problem that did not start like two years ago, it’s a fundamental problem that we’re fixing.”

“If you take a step back, eight to 10 years ago, the company had very lofty goals for growth.”