Nissan Plant ‘Closures’: Break away from Negative Cycle and Step up Alliance Strategy

Editorial

15:21 JST, July 18, 2025

Nissan Motor Co., which has been restructuring its operations, has decided on large-scale closures of its domestic plants for the first time in a quarter of a century. The company should minimize the impact on the local economy around the plants and at the same time hasten a strategy to seek a new alliance partner.

Nissan has announced that it will end compact car production at its Oppama plant in Yokosuka, Kanagawa Prefecture, at the end of fiscal 2027. This will effectively be a plant closure. Production of commercial vehicles at a subsidiary’s plant in Hiratsuka in the same prefecture will also end in fiscal 2026.

Nissan posted a ¥670.8 billion net loss for the fiscal year ending March 31, 2025, due to sluggish global sales. In May, when it announced its financial results, Nissan said it would close seven of its 17 vehicle production plants worldwide. The closure of the Kanagawa Prefecture plants is a part of such efforts.

The Oppama plant, which began operations in 1961, is a symbol of Nissan’s history, having produced its models including the “March” and “Bluebird.” There are said to be about 2,000 companies that do business with Nissan in the prefecture, and the impact on the local community will be significant.

It is hoped that Nissan, in close cooperation with local governments and other entities, will take detailed and meticulous measures to alleviate concerns over its restructuring plan, such as by helping employees find new jobs at its business-partner companies and helping small and midsize enterprises procure funds.

As a result of this restructuring, Nissan’s domestic vehicle production plants will be consolidated into a total of three locations, one in Tochigi Prefecture and the other two in Fukuoka Prefecture.

The management team needs to work to rebuild its business so that further restructuring will never occur.

In recent years, Nissan’s management has fallen into a negative cycle of declining brand power and development capabilities, and sluggish sales.

Under its “Revival Plan,” the large-scale restructuring measures launched by former President Carlos Ghosn in 1999, Nissan achieved a V-shaped recovery in business performance. The company then formed an alliance with France’s Renault SA and Mitsubishi Motors Corp. that leapt to become the world’s second-largest automotive alliance in the 2010s.

However, as a result of pursuing an increase in sales with an unreasonable expansion policy, Nissan’s product quality and development capabilities declined. Its brand power also deteriorated through its low-margin, high-volume business approach. It is now said that Nissan has no “well-selling models” to attract consumers.

The company’s leadership should reflect sincerely on the chaotic management of the past. Its business will not stabilize unless Nissan proceeds with strengthening its product development capabilities, as well as making thorough efforts to “stop the bleeding.”

The most important issue going forward will be to find a new alliance partner.

As the capital relationship with Renault has been drastically reviewed, ties between Nissan and Renault have weakened. The development of electric vehicles and next-generation vehicles, among other products, which will be Nissan’s main battleground in the future, will require massive investment. It will be difficult for Nissan to survive on its own.

Automobile tariffs imposed by the administration of U.S. President Donald Trump will also be a burden. The hope is that Nissan will look for a wide range of partners, including Honda Motor Co., with which negotiations for a business merger have broken down.

(From The Yomiuri Shimbun, July 18, 2025)