Nissan shuts factories in this country to plug plunging loses

Nissan opened a second factory at Purwakarta, Indonesia, in 2014, for an investment of 33 billion yen.The plant now produces three finished models — Datsun GO, Datsun GO+ and Datsun Cross
By : Bloomberg
| Updated on: 18 Mar 2020, 16:25 PM
File photo (AFP)
File photo (AFP)
File photo (AFP)
File photo

Nissan Motor Co. will end vehicle manufacturing at its plant in Indonesia as the struggling Japanese company tries to improve profitability.

“The end of vehicle production is part of an optimization plan that includes rightsizing, production optimization and reorganizing of business operations," Isao Sekiguchi, president of PT Nissan Motor Indonesia, said in an emailed statement Wednesday.

Chief Executive Officer Makoto Uchida has warned that deeper cuts probably are necessary to turn around the automaker, which has been in turmoil since the 2018 arrest of Carlos Ghosn, its former chairman. Profits are at decade lows, and more than 12,500 jobs will be eliminated. A plan to revamp the business is due in May, and the future of the Indonesia operations long was in question.

Similar Cars

Find More Cars
Datsun Redi-go (HT Auto photo)
Datsun Redi-go
799 cc | Petrol | Manual | 20.71 kmpl
₹3.58 - 4.99 Lakhs**Ex-showroom price
Datsun Go (HT Auto photo)
Datsun Go
1198 cc | Petrol | Manual | 19.02 kmpl
₹3.99 - 6.56 Lakhs**Ex-showroom price
Datsun Go-plus (HT Auto photo)
Datsun Go-plus
1198 cc | Petrol | Manual | 19.02 kmpl
₹4.2 - 7.05 Lakhs**Ex-showroom price
Nissan Magnite (HT Auto photo)
Nissan Magnite
18.75 kmpl | 999 cc | Manual | Petrol | 5 Person | FWD | 71 bhp | 96 Nm | 205 mm | 939 kg | 336 litres | 5 Gears | 1.0L B4D | No | 40 litres | Hrs | 750 Km | | No | Front & Rear | seconds | Kmph | 18 kmpl
₹4.99 - 10.05 Lakhs**Ex-showroom price
Nissan Kicks (HT Auto photo)
Nissan Kicks
1498 cc | Petrol | Manual | 13.9 kmpl
₹9.5 - 14.65 Lakhs**Ex-showroom price
Nissan Gt-r (HT Auto photo)
Nissan Gt-r
3799 cc | Petrol | Automatic (DCT) | 8.47 kmpl
₹2.12 Cr**Ex-showroom price

“Nissan has been trying to shut its factory in Indonesia for quite some time," said Andrey Wijaya, an analyst at RHB Sekuritas Indonesia. “The impact on its sales in Indonesia should be minimal."

FOLLOW US:Stay Updated with latest content - Subscribe us on
FOLLOW US:Stay Updated with latest content - Subscribe us on

Nissan share rose as much as 6.1%, the most since July 2016. Kyodo News reported earlier on the exit, without identifying the source of information.

Also read: Nissan may pull out of venture fund with Renault in cost-cutting drive

Last month, Nissan reduced its full-year operating profit forecast to 85 billion yen ($794 million) from an earlier estimate of 150 billion yen as the carmaker faces declining sales in the U.S., Japan, Asia and Europe.

Nissan opened a second factory at Purwakarta, Indonesia, in 2014, for an investment of 33 billion yen. That boosted total production capacity to 260,000 units a year. The plant now produces three finished models — Datsun GO, Datsun GO+ and Datsun Cross — although production was halted in late January.

“Datsun sales have slumped in particular, and propping it up would take a lot of time and money," Koji Endo, an analyst at SBI Securities in Tokyo, said in an email. “But for Nissan, layoffs and cost cuts are more important right now, so there’s a high chance that the brand will disappear."

Mitsubishi Motors Corp., which is in a global carmaking alliance with Nissan, already has a strong presence in Southeast Asia. The two Japanese carmakers’ pact also includes Renault SA. Nissan owns about 34% of Mitsubishi after taking a stake in the company in 2016.

“We will continue to work with our Alliance partners on ensuring manufacturing footprint in Indonesia and further enhance the Nissan brand by bringing in new models," Sekiguchi said in the statement.

First Published Date: 18 Mar 2020, 16:21 PM IST
Recommended For You
View All
NEXT ARTICLE BEGINS

Please provide your details to get Personalized Offers on

Choose city
+91 | Choose city
Choose city
Choose city
By clicking VIEW OFFERS you Agree to our Terms and Privacy Policy

Dear Name

Please verify your mobile number.

+91 | Choose city