Currently reading: Nissan announces major cuts, but Sunderland plant safe
Nissan will maintain Sunderland as European production hub despite closing factories around the world; focus will be on larger models and sports cars
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3 mins read
28 May 2020

Nissan has committed to the future of its Sunderland factory despite a recovery plan to reduce its production capacity by 20% globally. 

The Japanese firm has today announced its three-year transformation plan, dubbed Nissan Next, during which it seeks to substantially reduce its fixed costs. As part of the plan, it will close its plant in Barcelona, Spain, resulting in the loss of around 2800 jobs. 

The decision comes after Nissan reported its first annual operating loss for 11 years and its biggest for two decades. The company ended the 2019 financial year with a net loss of 671.2 billion yen (£5.08bn) and an operating loss of 40.5bn yen. Sales decreased 10.6% globally from 5.52 million to 4.93 million units, with a slowdown in North America and Europe primarily to blame. 

Nissan will reduce its production capacity by 20% over the next three years, also closing a plant in Indonesia. However, it intends to maintain Sunderland as a production base for Europe and "leverage the Alliance".

That's part of a broader new Renault-Nissan-Mitsubishi Alliance agreement for the three firms to increase technology sharing by focusing on key markets and product lines. Although not confirmed, recent reports suggest the Alliance plans to bring production of Renault models - namely the Kadjar and Captur SUVs - to the UK.

Nissan will also focus on streamlining its global product line-up. President Makoto Uchida admitted that, along with factors such as fluctuating currencies, “the sales decrease continues to weigh on our profit as we suffer from an ageing portfolio and limit profit distribution from our efforts to normalise sales”.

As a result, Nissan will reduce its number of global models by 20% in three years - down from 69 to fewer than 55. Resources will be reallocated to globally competitive models, with the core segments named as the C-segment (Qashqai), D-segment (X-Trail), electric vehicles (EVs) and sports cars. It will also shorten its product lifecycle so that the average age of its model portfolio is less than four years.

As part of the Alliance agreement, Nissan will focus its growth strategy on its most successful markets: Japan, China and North America. It will sustain its business in Europe, Latin America and Asia, but it will focus on its most successful models in each market. It will exit some markets, including South Korea and Russia, killing the Datsun brand in the process. 

In Nissan's home market of Japan, it intends to maintain a leadership in electrification and autonomous technology. By 2023, 60% of its sales are expected to be of electrified models. It also intends to grow its market share in China, with more EVs due to launch. 

In the US, Nissan is "discovering the difficulty of restoring a brand that is damaged", according to Uchida. It will reduce its focus on fleet sales, enhance its SUV and pick-up truck ranges and improve inventory management. 

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Europe remains "an important region for Nissan", but the firm acknowledges that market conditions are tough, with a combination of high regulation and competition. It intends to focus on profitable crossover SUVs along with an expansion of its EV line-up, while making greater use of its relationship with Renault.

It's expected that Nissan will reduce its focus on lower-margin segments such as superminis, meaning the future of the Micra looks bleak. 

Electrification will be a core focus going forward. Nissan claims it's on track to introduce more than eight new EVs globally by 2023, while it will expand its e-Power hybrid system across more regions and target a million electrified sales by 2023.

The company is also on track to achieve more than 1.5 million sales of models equipped with its ProPilot driving assistance system.

READ MORE

Renault-Nissan-Alliance members to massively increase technology sharing

Renault in talks to build SUVs at Nissan Sunderland plant

Nissan gives Sunderland plant £400m boost to build new Qashqai

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Comments
26

28 May 2020

Sunderland can be insulated from Brexit to an extent if it makes popular models for the UK market - which means midsize Nissan and Renault SUVs I guess. But the real question is when Nissan makes a major new investment in the plant, or just sweats the asset for as long as possible.

28 May 2020
scrap wrote:

Sunderland can be insulated from Brexit to an extent if it makes popular models for the UK market.

No car company in the UK can survive if it makes popular cars for the domestic market. The vast majority of production has to be left-hand drive.

28 May 2020

Expect that Renault will be producing the Micra in their plants instead.

 

They'll invest the money keeping the Renault factories open rather than continuing to expand and invest in Sunderland.   They're not going to burn their investment in Sunderland, but they will change their future plans due to Brexit.

 

That's why they're going for a closer tie-up.

29 May 2020

The Curse of Brexit strikes again!

28 May 2020

Yet again who would have though it? A 20% global reduction and Sunderland is unaffected. That decision alone takes all the remoaners arguements and scaremongering over the past four years and throws them well out to pasture. Even as a Brexiteer, with a 20% global reduction I'd have expected Sunderland to suffer.

Devasting news for Barcelona tho. Their employees may well be asking themselves what a fat lot of good being in the EU did for our jobs.

Just last year an article / comment like this would have provoked 6 pages worth of comment here but lets just see how many remoaners respond now.

28 May 2020
scotty5 wrote:

Yet again who would have though it? A 20% global reduction and Sunderland is unaffected. That decision alone takes all the remoaners arguements and scaremongering over the past four years and throws them well out to pasture. Even as a Brexiteer, with a 20% global reduction I'd have expected Sunderland to suffer.

Devasting news for Barcelona tho. Their employees may well be asking themselves what a fat lot of good being in the EU did for our jobs.

Just last year an article / comment like this would have provoked 6 pages worth of comment here but lets just see how many remoaners respond now.

28 May 2020
Autocar, this is the second time I've posted a lengthy comment when quoting someone only to see it deleted when I click 'save'. It's getting a bit ridiculous. Please can you sort it out so I don't have to retype everything again?

Anyway, what I said (in a more abridged form) was:

1. Good news for Sunderland (which it is and any fair minded Remainer will say as much);

2. Sounds like Sunderland is expected to make costs savings in return, which for the most efficient plant in Europe (or one of) isn't great. Further investment sounds like it'll be more limited as well judging from the proposed model lines;

3. Barcelona was struggling for a while according to reports so it was always likely to be first in the firing line; and

4. Being out of the EU hasn't insulated us from similar decisions by Rolls Royce, JCB et al, so I'm not sure being out of the EU would have helped the Barcelona plant.

28 May 2020
Dave Ryan wrote:

Being out of the EU hasn't insulated us from similar decisions by Rolls Royce, JCB et al, so I'm not sure being out of the EU would have helped the Barcelona plant.

We re not properly out ofthe EU yet and wont be for years.

28 May 2020
scotty5 wrote:

Yet again who would have though it? A 20% global reduction and Sunderland is unaffected. That decision alone takes all the remoaners arguements and scaremongering over the past four years and throws them well out to pasture. Even as a Brexiteer, with a 20% global reduction I'd have expected Sunderland to suffer.

Devasting news for Barcelona tho. Their employees may well be asking themselves what a fat lot of good being in the EU did for our jobs.

Just last year an article / comment like this would have provoked 6 pages worth of comment here but lets just see how many remoaners respond now.

Another Brexiteer living in cloud cuckoo land. We re not out of the EU properly yet, no deal has been done and when it is done its likely to be bad cos we want our cake and to eat it at the same time and we re not going to get it. Theres years and years of negotiating ahead of us, Nissan isnt going to close Sunderland at the mo as its invested so much money into it, but long term it may very well have to. And yes I m a "remoaner" as you childishly put it - the referendum was won by lies and cheating, something I will "remoan" about as long as I live - I dont like liars or cheats, one of the reasons why I cant stand the lying c*** who we sadly have as a figurehead pm at the moment or the real pm Dominic "break the lockdown cos I m better than everyone else" Cummings.

28 May 2020

Bloody BREXIT, oh hold on, be interesting how this one is spun.  Anyhow thanks to the EU why have factories in the EU at all, said it before Cars for Cheese deal might have been great for the French not so great for countries with Japanesse car factories in, looks like staying out of the EU was a good decision for Sunderland

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