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Pandemic Hit Nissan Plans To Cut Production By 30% Till December: Reuters


07/16/2020


Pandemic Hit Nissan Plans To Cut Production By 30% Till December: Reuters
The impact of the novel coronavirus pandemic on the auto industry causing flattening of demand has forced Japan’s Nissan Motor Co to plans cutting down its global vehicle production through December by 30 per cent year on year, claimed a report published by the news agency Reuters.  The aim of this move by the company is to ensure a turnaround in its business.  
 
According to the report quoting sources, between April and December, around 2.6 million vehicles is planned to be manufactured by Japan’s second largest automaker. In comparison, the company produced about 3.7 million vehicles in the same period a year ago. In the financial year ended March, about 4.6 million vehicles were made by Nissan.
 
Nissan, which has yet to announce a sales forecast for this financial year, declined to comment on its production plans.
 
Following the shutting down of factories and manufacturing facilities earlier this year because of the spread of the pandemic, global automakers have been under severe strain with a significant drop in demand.
 
In many countries, car dealerships were also forced to be closed because of the pandemic which resulted in a tanking of sale of vehicles in March through May. However as economies slowly opened up, the drop in sale numbers seemed to have slowed down in June.
 
The pandemic has caused particular hardship for Nissan because the company was already struggling with a drop in its sale and a fast eroding cash position. After posting its first annual loss in 11 years, a far-reaching restructuring plan was unveiled by the company in May.
 
About 307,000 vehicles globally were manufactured by the company in the first two months of this financial year. Nissan is the maker of the Rogue SUV and the Leaf electric car. According to monthly production figures of the company, that number was 62 per cent lower than the same period a year ago.
 
It will announce June output figures next month.
 
In the first quarter, the company is making plans for increasing manufacturing from 510,000 vehicles to around 930,000 in July-September, said the Reuters report quoting sources. The report further claimed that the output of the company for the second quarter will be about 25 per cent lower compared to the same period a year ago.
 
Production is expected to increase to around 1.1 million vehicles in October-December, roughly 8% lower on the year.
 
It is expected that Nissan’s output will be hit the hardest at its home market of Japan and drop by about 47 per cent compared to the same period a year ago. This is because of the decision of the company to cut more shifts at its Japanese assembly plants. Domestic output will recover slightly through December.
 
(Source:wwww.reuters.com)