Nissan Motor recently announced that Dongfeng Nissan, its joint venture in China, had shut down production at a facility in Changzhou last week. The act was part of Nissan's efforts to optimize its performance in the world's largest car market.
According to NHK, Nikkei, and Bloomberg, the Changzhou plant's closure represents a loss of 130,000 internal combustion engine SUVs annually for Nissan, nearly 10% of the automaker's total production in China. Nissan had eight factories in the country with a total production capacity of 1.6 million units.
In April 2024, Nissan sold 54,921 cars in China, down by 10% from last year. The intensifying competition with BYD and other China-based carmakers impacted the volume. Nissan produced 220,804 vehicles in the first four months of 2024, a 12% decrease from 2023.
Dongfeng Nissan told Chinese media that it had adjusted its production capacity and rearranged resources to accommodate changes in company strategies and the business environment. The automaker also said it would invest over CNY10 billion (US$1.4 billion) in EV production and R&D while ensuring the production capacity of ICE vehicles.
According to the China-based Securities Times, Dongfeng Nissan's Changzhou plant began production in November 2020. With this factory and other facilities in China, the carmaker was able to manufacture 1.6 million units yearly. However, its sales dropped from 1.13 million to 673,700 cars between 2020 and 2023.
On June 16, Dongfeng Nissan disclosed that it aimed to inject more than CNY10 billion into the EV segment in the next three years. The company will increase its R&D personnel from 1,600 to 4,000.
Dongfeng Nissan said it would scale the Chinese market with local talents and technologies. By the end of 2026, the automaker plans to launch seven EV models in China. It also plans to grow its exports and has set an initial goal of 100,000 cars.
Nissan targets one million units of sales volume in China by March 2027. It is at 800,000 cars now.
The ongoing fierce rivalry in the Chinese car market has decreased the total sales volume of six Japanese automakers, including Toyota, Nissan, and Honda, by 20% from the peak in 2020. This situation has prompted these carmakers, who move slower in EV development, to completely revise their strategies in China.
Mitsubishi Motors decided to cease production in China last year. Honda has been recruiting employees who will retire voluntarily at its Chinese sites to reduce its workforce.
