Key Facts
• On July 15, Nissan announced the closure of Oppama and Shonan plants by 2027.
• Oppama plant is located in Yokosuka, Shonan plant in Hiratsuka, both in Kanagawa Prefecture.
• The decision ends vehicle production at Nissan’s founding site.
• Collaboration with Taiwan’s Foxconn was considered but ultimately denied by Nissan.
• Nissan plans to reduce global production capacity from 3.5 million to 2.5 million units.
• Domestic factory utilization rates currently hover at 60%, with plans to improve to 100%.
• Nissan Kyushu plant in Fukuoka will absorb Oppama’s production functions.
• Domestic production costs are expected to decrease by 15% in the mid-to-long term.
• New EV models like the Leaf and Elgrand are critical to maintaining factory utilization.
• U.S. exports face challenges from high tariffs under U.S. trade policies.
Summary
Nissan has decided to cease production at its Oppama and Shonan plants by 2027, marking a significant shift in its domestic operations. This move, part of a broader restructuring plan, aims to address overcapacity and improve production efficiency. The company plans to reduce global production capacity to 2.5 million units and consolidate 17 production sites into 10. While the closure will impact employees, suppliers, and local economies, Nissan has committed to supporting affected workers through reassignment options. The Kyushu plant will take over Oppama’s production, potentially improving its utilization rate to 100% and reducing domestic production costs by 15%. However, the success of this strategy hinges on the market reception of new EV models like the Leaf and Elgrand. Additionally, U.S. export challenges due to high tariffs remain a concern. Nissan’s leadership under Ivan Espinosa has emphasized a commitment to reform, avoiding the pitfalls of previous management strategies. Despite these efforts, the company faces significant hurdles in stabilizing factory utilization and ensuring the competitiveness of its new products.
