Nissan to Close Flagship Car Plant in Japan
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Nissan Motor Co. plans to shutter vehicle output at its main domestic plant and transfer operations to a factory in Kyushu as it seeks to reduce costs and production capacity in a broader effort to restructure.
The Oppama plant, which has been in operation since 1961 and employs roughly 2,400 workers, will cease production by March 2028, the Japanese carmaker said in a statement July 15.
The decision isn’t a surprise, given the facility had already been on a list of plants facing closure. But it’s a big move, and will have large implications for the local economy, as Nissan looks to raise funds and cut expenses to turn around its rapidly deteriorating financial and operational position.
“Today’s announcement marks a restructure that comes with significant pain,” CEO Ivan Espinosa said at Nissan’s headquarters in Yokohama, Japan. “However, I firmly believe that carrying through with these actions is essential to overcoming the current situation and returning to a path of growth.”
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There won’t be any other consolidation or cutting of vehicle production sites in Japan, Espinosa said. He added that it hasn’t been decided whether employees will be transferred within the company, or to whom some assets will be resold.
The Oppama plant has a long production legacy — it was the facility to make the first-generation Leaf, the world’s first mass produced electric vehicle, in 2010. The hatchback marked a major milestone for Nissan and was initially built exclusively at Oppama. As Leaf production shifted elsewhere, the plant’s output narrowed to focus on smaller vehicles, primarily the Nissan Note and its upmarket twin, the Nissan Aura.
The plant is also a key economic pillar for Yokosuka and Kanagawa prefectures, employing thousands of workers and is also a significant taxpayer. Hundreds of local subcontractors, from parts suppliers to logistics firms, rely on its operations and its workforce keeps restaurants, retail shops and services near Oppama Station humming.
Nissan also said July 15 it will end contract production of its NV200 van at a plant operated by Nissan Shatai Co., which it owns 50% of. That will happen some time during the fiscal year ending March 2027.
In May, Espinosa announced plans to cut 20,000 jobs and consolidate the company’s manufacturing from 17 factories to 10. By doing so, Nissan will likely reduce annual production to 2.5 million units from 3.5 million. Espinosa, 46, was promoted to the top job earlier this year.
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Other Nissan facilities located alongside the Oppama factory, including a research center, a test track, a crash test facility and a wharf, will be unaffected by the plant’s closure, the automaker said.
The embattled carmaker has been looking for solid financing and new business partners after it lost a lifeline following the collapse of its tie-up with Honda Motor Co. earlier this year. Management turmoil has distracted the company ever since the 2018 arrest and ouster of former Chairman Carlos Ghosn, leading to an aging product lineup, shrinking margins and the loss of an early lead in mass-market electric cars.
Nissan said the related costs and impact will be disclosed at its next quarterly results announcement, which is scheduled for July 30.
