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Slowing Demand Forces Nissan To Reduce Car Output In China; Reuters


12/28/2018


Slowing Demand Forces Nissan To Reduce Car Output In China; Reuters
The drop in the demand for cars in the largest car market of the world China in the entire of 2018 has put global car and auto makers under pressure. According to a report published by the news agency Reuters, compared to what the Japanese auto manufacturer Nissan Motor Co had planed earlier, about 30,000 fewer vehicles would be manufactured by it in China in the coming months.
 
Vehicles sale in the past few months has plummeted in China because of a slowing economy and an acrimonious trade war with China which had earlier forced US automaker Ford Motor Co and South Korean car maker Hyundai Motor Co to announce cuts in their production in the market.
 
According to the report, the cut in production by Nissan of a total of about 30,000 units would be done in the December-February period compared to what the company had planned and announced initially. The report did not name the company source that formed the basis of the report.
 
Typically almost every large automobile company make plans about the total number of vehicles that it would manufacture with respect to each of their production facilities. However, changes in perceived and actual demand and supply chain issues during the forecast period also forces companies to either increase or decrease their production targets for particular periods. The number of vehicles that Nissan had initially planned on manufacturing during the said period is however not known.
 
During the three-month period ended February this year, the Japanese car maker manufactured almost 400,000 units in China. That period include those two months of the year when there is a general trend of slowdown in sale because of the build up for the long Lunar New Year holidays in China.
 
According to another report published in Japan’s Nikkei business daily on Thursday, the production cuts by Nissan would be done at three Chinese plants that include the one in Dalian, where the company manufactures the popular Qashqai and Infiniti QX50 SUV crossover models, and the other in Zhengzhou, where it assembles the X-Trail SUV crossover as well as the Venucia brand models.
 
There was no comment available from Nissan.
 
Accounting for almost one fourth of the total annual global vehicle sales, China is the second-largest market for Nissan. In 2017, the Chinese market accounted for sale of about 1.5 million Nissan vehicles. Earlier this year, the company had announced that it had plans to increase sale in China to about 2.6 million units by 2022 which would make China the largest market for Nissan in terms of the volume of sale.
 
But the demand for cars in the Chinese market has slowed down considerably in recent months and the industry experts are predicting that the market would possibly record its first drop in annual sale for 2018 since at least 1990.
 
Compared to 12 per cent growth for the January-November period in China in 2017, the sale growth of Nissan for the same period for the current year was just 3 per cent.
 
(Source:www.reuters.com)


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