Tokyo: Nissan Motor Co. will stop building the Rogue in Japan at the crossover’s next remodelling around 2013, transferring output of one of its most popular US vehicles to reduce exposure to the yen, an executive with direct knowledge of the matter said.
The Rogue is made at Nissan’s 430,000 units-a-year Kyushu factory in southern Japan, and is the brand’s best-selling light truck in the United States.
Japanese automakers are looking for ways to reverse currency-related losses as the yen’s strength against the dollar makes vehicles shipped to the US from Japan less attractive and profitable.
“There won’t be another Rogue made in Japan (when it is remodelled),” the executive said, declining to be identified due to the sensitivity of the matter.
The end of the Rogue’s production in Japan could result in a hole of more than 100,000 vehicles a year at the Kyushu factory -- or about a quarter of its capacity -- and comes at a sensitive time for Japan’s second-biggest automaker.
Nissan is looking to spin off the factory, which also builds the Teana, X-Trail and other models, into a new subsidiary by late 2011 to allow it to broach wage negotiations with labour unions and seek lower prices from suppliers.
“We do not disclose detailed plans of future models but among the many ways to reduce the impact of the yen, increasing local production has always been one of our options,” Nissan spokesman Toshitake Inoshita said.
Japanese automakers are in a tough spot politically as domestic suppliers and factory workers fret about a hollowing out of the manufacturing sector at home. Japan lost its place as the world’s top car producer to China last year as total output sank more than 30 percent to 7.93 million units.
Nissan chief operating officer Toshiyuki Shiga, also chairman of Japan’s auto industry lobby, has said Nissan wants to maintain domestic production at a minimum one million vehicles a year despite a shrinking home market and a dollar that is far weaker than its comfort zone of 95 yen.
Last business year, Nissan built 1.025 million vehicles in Japan.
US capacity unused
The source declined to say where the Rogue would be built, but Nissan has capacity left over at its two US factories, in Tennessee and Mississippi.
Sales of the Rogue, which shares vehicle underpinnings with other car-based SUVs such as the Qashqai and X-Trail, exceeded 89,000 units in the US in the first 11 months of 2010, accounting for just over a third of Nissan-branded light trucks in the world’s second-biggest car market.
It also sold about 16,000 Rogues in Canada and Mexico through October, according to the latest data available.
Nissan has said it would aim to cut costs and offset currency headwinds by importing more parts from overseas using a strong yen, and make production even of small cars profitable in Japan.
But executives have repeated that a yen at 90 to the dollar would still be too strong for the Japanese auto industry and threaten jobs in Asia’s second-biggest economy. The dollar was trading around 82.90 yen on Monday.
Nissan has made headlines with its decision to shift output of the high-volume March/Micra subcompact to Thailand from this year for sales of that model in Japan.
Local North American production has helped Nissan attract customers in other segments compared with its Japanese rivals.
Senior vice president Junichi Endo told reporters on Monday that Nissan’s Versa subcompact, built in Mexico, was now the best-selling model in the US entry segment, overtaking Toyota Motor Corp’s Yaris, which is shipped from Japan.
Shares of Nissan, held 43% by Renault SA, fell 0.1% to 821 yen, in line with the benchmark Nikkei average.