Nissan to further cut production in Japan

Sharp global slowdown forces Nissan to cut production again

TOKYO November 14, 2008; Tomoko A. Hosaka writing for the reported that Nissan Motor Co., facing a sharp slowdown in global demand, said Friday it would cut production for the second time in two weeks.

Japan's third-biggest automaker said it plans to lower domestic output by 72,000 vehicles during the rest of the fiscal year through March 2009, on top of a global production reduction of 200,000 units it announced on Oct. 31.

"In light of declining sales in major global markets, the production cut is necessary in order to manage inventory levels and ensure a balanced production supply," Nissan said in a statement.

While Japanese automakers are faring better than American rivals, they too have been battered in recent months as consumers in the U.S., Europe and even Asia increasingly shun showrooms.

Nissan last month reported a 39 percent drop in second quarter profit to 73.5 billion yen ($746 million).

The Tokyo-based company also sharply lowered its net profit forecast for the fiscal year to 160 billion yen ($1.6 billion), down 67 percent from the previous year. Earlier, Nissan had expected a 340 billion yen ($3.5 billion) profit for the fiscal year.

Its Japanese rivals, including Toyota Motor Corp. and Honda Motor Co., have also slashed their profit estimates and output projections for the year.

From December, Nissan will slow production line speeds and halt operations completely on some days at its Tochigi and Kyushu plants.

The Tochigi factory, north of Tokyo, manufactures Infiniti luxury models for export to North America as well as the 350Z sports car. The Kyushu facility's models include the Murano, a mid-size crossover sport utility vehicle, and the X-Trail, a compact crossover SUV.

Nissan will also eliminate four shifts in December at its Oppama plant southwest of Tokyo, which makes small passenger cars for the domestic market such as the Cube, Note and March.

Two engine plants will sit idle on some days in December, according to the company.

Nissan said it would retain 1,000 short-term workers through December, but plans to reduce the number to 500 in 2009.