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Nissan announces fresh production cuts

Nissan announces fresh production cuts
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First Published: Thu, Jan 15 2009. 04 50 PM IST
Updated: Thu, Jan 15 2009. 04 50 PM IST
By AFP
Tokyo: Nissan Motor Co. said Thursday it will further reduce its domestic production by 64,000 vehicles through February and March amid reports that it is set to post a loss this year.
Japan’s third largest carmaker has now slashed its planned production in the current financial year to March by 289,000 vehicles, or about 21%, from an original target of 1.388 million.
Nissan, which is controlled by France’s Renault, said it would halt production at three assembly plants for up to 13 days in February, followed by further stoppages in March.
“This further reduction is necessary to manage our inventory levels and ensure a balanced production supply, in response to continued declines in the global vehicle sales,” a company statement said.
Japanese manufacturers have seen a dramatic reversal in their fortunes in recent months as recessions in major markets batter demand for cars. Nissan has announced thousands of job cuts worldwide in recent months.
The Yomiuri newspaper reported Thursday that Nissan is set to log its first operating loss in the current financial year to March since Renault sent Carlos Ghosn to rescue its Japanese partner from the brink of bankruptcy in 1999.
Nissan in October lowered its forecast for operating profit for the year to March 2009 to 270 billion yen (three billion dollars) from a previous projection of 550 billion yen.
The Yomiuri said the company would log a loss of at least tens of billions of yen (hundreds of millions of dollars) as sales in the key North American market have fallen rapidly amid the economic downturn.
The strong yen is also expected to erode Nissan’s profits by more than 70 billion yen, the daily said without naming its sources. Nissan declined to confirm or deny the report.
The global slowdown has badly shaken Japan’s automakers, which in recent years had cashed in on brisk demand for their smaller and more fuel-efficient cars. Last month Toyota predicted its first ever annual operating loss.
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First Published: Thu, Jan 15 2009. 04 50 PM IST
More Topics: Nissan | Carmaker | Japan | Auto | Renault |