Nissan plans to close plants in Japan, Mexico, Yomiuri says

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(Bloomberg) — Nissan Motor Co. plans to close two factories in Japan, as well as locations in four other countries as part of its restructuring and cost-cutting process, the Yomiuri newspaper and other news outlets reported, citing unidentified sources.

In Japan, Nissan is looking to close facilities in Oppama and Hiratsuka operated by manufacturing subsidiary Nissan Shatai Co., which represent about 30% of domestic production, according to Kyodo News. Both are located in Kanagawa prefecture, an area south of Tokyo where Nissan’s head office is based.

The once-dominant Japanese carmaker has been dealing with a slump in global sales and profitability in the face of rising competition from China’s fast-growing electric vehicle sector. Nissan has struggled to regain momentum in the key US market, and is saddled with an outdated product lineup, bloated dealership incentives and a mountain of debt.

Earlier this week, Nissan said it would close seven production facilities globally, but did not specify the locations. It’s also planning to eliminate 20,000 jobs. The measures are aimed at cutting costs by ¥500 billion ($3.4 billion), and were announced after Nissan reported one of its biggest annual losses.

Globally, Nissan is considering shutting two plants in Mexico, as well as ending production in India, Argentina and South Africa, the Yomiuri reported.

Nissan said in a statement that reports of plant closures are “speculative” and not based on any official information from the company.

“There have been reports about the closure of our factories but these are based on speculation,” subsidiary Nissan Shatai said. “They have not been announced by our company and are not true.”

Talks to combine Nissan with Honda Motor Co. fell apart earlier this year, leading to the ouster of its former chief executive officer. Ivan Espinosa, Nissan’s new CEO who took up the role in April, said in an interview Thursday that his restructuring plan can save the automaker without the help of an outside partner.

“What we’re doing is resetting the size of the company,” Espinosa said.

The Oppama plant focuses on Nissan’s electric car production, including the Leaf and the Note, and has an annual production capacity of 240,000 cars. The Hiratsuka factory produces commercial vehicles with a capacity of 150,000 units.

If the Oppama plant is shuttered, it would be the first time that Nissan has closed a major domestic factory since 2001, according to the Yomiuri.

—With assistance from Masatsugu Horie.