Nissan Motor Co. is reducing production of its key North American models by 30% as the Japanese automaker struggles with weakening US demand and bloated inventory levels, according to Nikkei.
The company has cut weekly operating days at its Tennessee and Mississippi plants, resulting in 40,000 fewer vehicles produced in September and October. The production slowdown, initially planned through October, will now extend to year-end. The cuts primarily affect the Rogue SUV and Frontier pickup truck, which together account for 40% of Nissan’s US sales.
The automaker’s US inventory stands at 100 days of supply, more than triple Toyota’s level and double Honda’s, according to Cox Automotive. To clear excess stock, Nissan is offering $4,000 in average incentives per vehicle – 30% above the industry average.
The sales weakness puts Nissan’s full-year target of 3.65 million global vehicle sales at risk. The company already reported a 4% drop in worldwide deliveries to 1.59 million units in April-September. Its projected operating profit for the current fiscal year is 500 billion yen ($6.52 million), down 12%.
Compounding Nissan’s challenges is its delayed transition to electrified vehicles. While rivals benefit from growing hybrid demand, Nissan lacks hybrid offerings in the US market. The company has also indefinitely postponed plans to build two electric vehicle models at its Canton plant starting in 2025.
