According to recent reports by Reuters and Nikkei Asia, Japanese automaker Nissan may be shutting down some of its manufacturing operations in Japan and emerging markets as part of its aggressive and ambitious restructuring plan. Sources tell the outlets that two of the brand’s Japanese factories, both in the Kanagawa prefecture, are on the chopping block. Specifically, the two plants in question are Nissan’s main Oppama plant in Yokosuka and the Shonan plant of its Nissan Shatai unit, a plant that produces commercial vehicles.
The two plants comprise a large chunk of Nissan’s production capacity in Japan. The loss of the Oppama plant, the first Nissan plant to mass produce electric vehicles, would greatly impact the automaker as it’s a popular tourist attraction in the area, has an annual production capacity of around 240,000 vehicles, and employs 3,900 people in manufacturing and research roles.
Nissan Oppama Plant
Nissan
However, according to reports by the Japanese business publication Kyodo News, some factory workers stated that Nissan told employees at the Oppama plant on Monday, May 19, that reports of its planned closure were not definitive. In addition, Kanagawa prefectural government officials held an emergency meeting the same day to discuss plans to offer reemployment and consultation services to potentially affected employees if the plant closes.
“If they really do close, it will have a huge impact on employment and the economy,” Kanagawa Gov. Yuji Kuroiwa said at the meeting. “We will consider our options from a multitude of angles.”
Kuroiwa also noted that Nissan contacted the prefecture on Saturday after the reports from Reuters and Nikkei surfaced, which was followed by a visit to the prefectural office on Monday to inform them that nothing had been decided. Local government officials reportedly told Nissan that they hoped the automaker would consider the potential consequences if it closed its facilities.
During a May 19 press conference, Yokosuka Mayor Katsuaki Kamiji noted that the plant has had a rich history in the city for nearly 60 years and said that he hopes it will be “restored to its former brilliance.”
Nissan Oppama Plant
Nissan
Nissan is also considering ending production in other countries
The potential plans to close the Japanese plants are related to Nissan CEO Ivan Espinosa’s Re:Nissan consolidation plans, which were revealed during a presentation highlighting financial results for the company’s 2024-2025 fiscal year.
The plans include job cuts affecting about 20,000 people and heavy shifts to its global production capacity, including the shutdown of seven global assembly plants to reduce its global production to just 10 plants by the end of the 2027-2028 fiscal year. According to a source who spoke to Reuters, Nissan is considering shuttering plants in South Africa, India, Argentina, and Mexico.
A Nikkei Asia report states that two of the company’s three Mexican factories that are on the chopping block include the CIVAC Plant, which has been making vehicles in the country since 1961. Last month, Nissan Latin America said it would consolidate production of its Frontier and Navara pickups from its plants in Mexico and Argentina into a single production hub centered around the plant.
Final thoughts
The stories that have surfaced through Japanese business news outlets remind me of a quote regarding the ~20K job cuts that Nissan CEO Ivan Espinosa said during his announcement of the Re:Nissan plan last week.
“It is a very, very painful and sad decision to take. We wouldn’t be doing this if it were not necessary for the survival of Nissan,” Espinosa said. “Are we confident that this is enough? The answer is yes, this will be enough to drive the results that we need, but we need to move fast. We want to bring the heartbeat back.”
Espinosa and the rest of the Nissan C-Suite have a lot on their hands when it comes to Nissan’s future. However, a bloated production capacity is just one of a long list of problems that came long before the Trump Administration’s tariff-heavy trade policies. For now, we have to keep an eye on the restructuring process from start to finish and see how things will go for the storied Japanese automaker.
