In response to weakening demand in the U.S., Nissan Motor Co., Ltd. NSANY has significantly curtailed production at its main Japanese plant, insiders reveal.
What Happened: Nissan has slashed its planned production by a third at its Kyushu plant in southwest Japan, Reuters reported on Monday. This reduction will affect the output of the Rogue crossover model, a key vehicle in the company’s lineup.
Unlike its rivals Toyota Motor Corp. TM and Honda Motor Co., Ltd. HMC, Nissan does not offer hybrid models in the U.S. This has led to Nissan missing the recent uptick in demand for hybrid vehicles as U.S. consumers’ enthusiasm for electric vehicles wanes.
Nissan now intends to produce just under 25,000 vehicles at its Kyushu plant this month, including about 10,000 Rogue crossovers for export, which is half of its original plan.
Nissan’s current inventory stands at 640,000 vehicles globally, the highest in over four years. The company’s struggles in the U.S. market add to its existing challenges of a shrinking market share in China.
See Also: Tesla Introduces New $120 Detailing Kit For All Of Its Lineup But Cybertruck
Why It Matters: Nissan’s decision follows a near-total wipeout in its profits from April to June and a reduction in its full-year outlook. The company had to offer substantial discounts in the U.S. to clear out the 2023 model of the Rogue, which was becoming harder to sell with the introduction of the 2024 model.
Earlier in July, Nissan and Honda were contemplating a collaboration to develop automotive software and EV charging infrastructure to enhance their competitiveness in the electric vehicle market.
This move is intended to help the companies catch up in the EV market, where they have lagged behind competitors like Tesla Inc. TSLA and China’s BYD Co. Ltd. BYDDY BYDDF.
Despite selling two electric vehicles, Nissan’s lack of hybrid offerings in the U.S. market has been a significant setback. Goldman Sachs analysts noted a shift in demand towards hybrids in the overall U.S. market, with Nissan’s hybrid launch not expected until 2026. In May, Nissan paused its plans for two electric sedans in the U.S. while expanding its EV lineup to five vehicles.
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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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