Nissan to make fewer cars in China as demand slows

TOKYO • Nissan Motor will produce 30,000 fewer vehicles in the coming months in China than what it had planned, according to a person briefed on the matter.

This comes as global automakers grapple with falling demand in the world's biggest car market.

After Ford Motor and Hyundai Motor, Nissan is the latest automaker to cut production in the country, where slowing economic growth and a crippling trade war with the United States have pummelled vehicle sales in the past few months.

Nissan plans to cut production in China by a total of 30,000 units during the December-February period from its initial output plans, according to the person, who declined to be identified as the plans are not public.

Automakers set initial plans on the number of vehicles to produce at each of their plants.

These plans can be modified due to demand, supply chain issues and other factors. It was not known how much Nissan had planned to produce in the three months.

The automaker produced nearly 400,000 units in the country during the three-month period ended February this year.

The period covers the first two months of the year, when sales are usually slow in the run-up to the Chinese New Year holidays.

Japan's Nikkei business daily reported late on Thursday that Nissan plans to cut production at three plants in China, including one in Dalian, where it produces the popular Qashqai and Infiniti QX50 SUV crossover models, and in Zhengzhou, where it makes the X-Trail SUV crossover, one of its top-selling models, and Venucia brand models.

A Nissan spokesman in Beijing yesterday declined to comment.

China is Nissan's second-largest market, accounting for roughly one-quarter of its annual global vehicle sales. It sold 1.5 million vehicles in China last year and, earlier this year, said it planned to boost sales to 2.6 million units by 2022, making China its biggest market in terms of vehicle sales.

But a stretch of booming demand for cars in China seems to have come to an end, with the market on track to post a fall in annual sales for the first time since at least 1990.

Nissan's group sales in China rose 3.9 per cent in the January-November period, slowing from a 12 per cent jump a year ago.

A slowdown in the major market comes at a time when the Japanese automaker is grappling with a scandal involving alleged financial misconduct of Carlos Ghosn, leading to his arrest and subsequent ouster as chairman, and straining ties with French auto-making partner Renault.

REUTERS

A version of this article appeared in the print edition of The Straits Times on December 29, 2018, with the headline 'Nissan to make fewer cars in China as demand slows'. Print Edition | Subscribe