Nissan, Japan’s third biggest carmaker, plans to transfer the production of its “March” subcompact cars to Thailand in an effort to deal with the strong yen and sluggish sales.
According to the company’s Global Communications unit, Nissan has decided to make such production shift which will make it become the first auto maker to move production of a top-selling model overseas.
The communications unit said in a press release that Nissan now manufactures the 5-seater cars, with 1.2-litre, 1.4-litre or 1.5-litre gasoline engine, for domestic market at one of its factories in Kanagawa Prefecture, south of Tokyo, and sells about 47,000 units a year.
When the vehicle is due for a full remodeling next year, it said, Nissan will cease production in Japan and import all units for the domestic market from Thailand.
The redesigned March subcompacts, to be sold in Japan and emerging markets in Asia, will use a chassis developed with French partner Renault SA and the production costs for the car will be cut by about 30 percent through the procurement of as much as 90 percent of parts locally.
The press release said Nissan unit in Thailand was chosen because the country’s offers tax breaks for the production of fuel-efficient small cars.
It said Nissan intends to maintain output at the Kanagawa factory by rolling out electric vehicles and newly developed subcompacts there starting next year.
Meanwhile, Nissan will also shift production of the “Micra”, which is the name given to March for overseas markets, from the United Kingdom to India next year.
In addition, Nissan will reduce the number of new and redesigned models to be introduced over five years from 60 to 48, with a plan to forgo a full remodeling of its “Cima” luxury car and discontinue the development of any new sports car.
As part of its restructuring, Nissan will also postpone the opening of a plant in Morocco, which will be jointly built with Renault and initially scheduled for 2010 while the construction of its factories in India and Russia will be downsized or delayed.
The company is considering eliminating bonuses for its executives for the current fiscal year, which ends in March, and intends to sharply reduce their pay for April and afterward. Nissan paid a total of 2.23 billion yen (US$24.9 million) to ten directors for the last fiscal.
Nissan had initially projected that its consolidated operating profit for fiscal 2008 would fall about 30 percent on the year to 550 billion yen but lowered to 270 billion yen last October. The automaker will very likely end up logging an operating loss because sales have continued to slump globally and the yen has appreciated further.