Nissan Motor is preparing a 30% year-on-year cut in worldwide vehicle production through December as falling demand because of the COVID-19 pandemic complicates its turnaround efforts, two sources with information of the matter informed Reuters.
The Japanese automaker prepares to produce around 2.6 million vehicles between April and December, decreasing from 3.7 million during the same duration last year, the sources said. The automaker made 4.6 million cars in the financial year ended in March.
The sources spoke on the condition of anonymity as the details are not public. Nissan, which has yet to announce a sales forecast for this financial year, refused to comment on its production plans.
Global automakers are having a hard time after factories were closed earlier this year to deal with the spread of the coronavirus.
Car dealerships were also shut down in many countries, resulting in a decline in vehicle sales in March through May, although the decline in sales slowed in June as economies started to reopen.
The coronavirus pandemic is not the only reason behind the declining sales for Nissan, as it was already grappling with declining sales and a deteriorating cash position. In May, it revealed a far-reaching restructuring plan after posting its first yearly loss in 11 years.
In the first two months of this financial year, the automaker made around 307,000 vehicles worldwide, down 62% from last year, according to monthly production statistics.
It will announce June output figures in August.
Nissan is preparing for production to boost from 510,000 vehicles in the first quarter to around 930,000 in July-September, the sources stated. Second-quarter output will be no less than 25% less from a year earlier, according to Reuters calculations.
Production is expected to boost to around 1.1 million vehicles in October-December, approximately 8% less on the year.
In July-September, Nissan’s output will be hit hardest in Japan, dropping around 47% from last year, after the automaker stated it would slash more shifts at its Japanese assembly plants. Domestic output will recover a little more through December.
