On June 22nd, according to Nikkei News, Nissan will reduce its production capacity in China by about 10%. Its joint venture passenger car factory with Dongfeng Motor in Changzhou, Jiangsu Province will be closed on June 21st, with an annual production capacity of about 130000 units.
A Nissan spokesperson stated that "this is to optimize production" and added that the company is still committed to developing its business in China. Nissan's total production capacity in the world's largest automotive market is 1.6 million vehicles, with the Changzhou factory accounting for approximately 8% of it.
It is reported that Nissan mainly produces cars in China through a joint venture with Dongfeng Motor Group. Currently, joint venture factories have been established in multiple cities such as Dalian, Wuhan, Guangzhou, and Changzhou.
What will be closed this time is that Changzhou Factory is actually a branch of Zhengzhou Nissan Automobile Co., Ltd. Zhengzhou Nissan Automobile Co., Ltd. was founded in March 1993, which is the first joint venture of Nissan Automobile Co., Ltd. and Dongfeng Motor Group in Chinese Mainland, with registered capital of 1.29 billion yuan and total assets of about 5.5 billion yuan. The company is positioned as the main development base for Dongfeng and Nissan's dual brand LCV products. The company's headquarters is located in Zhengzhou Economic and Technological Development Zone, China.
In June 2018, Dongfeng Motor Co., Ltd. signed a cooperation agreement with the Changzhou Municipal Government to carry out a comprehensive asset restructuring of the Changzhou base, establishing Dongfeng Motor Co., Ltd. Changzhou Branch. After fully acquiring the assets and personnel of the original Zhengzhou Nissan Changzhou Branch, new business was carried out, and an additional investment of 1 billion yuan was added for comprehensive upgrading and transformation of production technology. On November 18, 2020, Dongfeng Nissan's Changzhou factory was officially put into operation, with an annual production capacity of 120000 vehicles, mainly producing Nissan branded car models.
According to official information, the Changzhou factory is an important development base for Dongfeng Nissan in the Yangtze River Delta. The business scope of the Changzhou factory includes the development, design, manufacturing, and sales of passenger cars and parts, castings and forgings, powder metallurgy products, electromechanical equipment, tools, and molds. At present, the main production model is the SUV "X-Trail" series.
According to the disclosure, after the closure of the Changzhou factory, the SUV "X-Trail" produced by the factory will be transferred to the Dalian factory for production. As for the reason for the closure of the Changzhou factory, it is mainly due to the continuous decline in Nissan's sales in China.
According to official data from Nissan, the cumulative sales of passenger cars and light commercial vehicles in Nissan China in 2018 were 1563986 units, a year-on-year increase of 2.9%; In 2019, the sales volume was 1546891 units, a year-on-year decrease of 1.1%; In 2020, the cumulative sales volume was 1456738 units, a year-on-year decrease of 5.8%; In 2021, the cumulative sales volume was 1381494 units, a year-on-year decrease of 5.2%; In 2022, the cumulative sales volume was 1045197 units, a year-on-year decrease of 22.1%; In 2023, there were only 793768 units, a year-on-year decrease of 16.1%. Nissan's sales in China have been declining year-on-year for five consecutive years, with a trend of expanding decline.
It should be pointed out that in recent years, with the continuous shift of the Chinese automotive market towards electrification, domestic electric vehicle manufacturers such as BYD have rapidly emerged in China. However, Japanese car manufacturers still focusing on fuel vehicles have encountered difficulties in their sales in China. The data also shows that while the overall Chinese automotive market and the sales of many domestic car manufacturers in China continue to grow, the sales of Japanese car manufacturers are still declining, and their market share is also continuously decreasing. Especially in the Chinese electric vehicle market, the presence of Japanese car manufacturers is very low.
According to the China Association of Automobile Manufacturers, the market share of Japanese car manufacturers in 2020 was 23.1%, which decreased to 12.1% from January to May this year, while the market share of Chinese brands increased from 38.4% to 61.3%.
As early as March this year, there were reports that Nissan would negotiate with local joint ventures in China to reduce China's automobile production capacity by up to 30%. Meanwhile, Honda also plans to reduce China's automotive production capacity by 20%. Prior to this, Toyota had already initiated production cuts and layoffs in China, and Mitsubishi Motors announced its full exit from the Chinese market in the second half of 2023.
The Nikkei report also indicates that price competition in the Chinese automotive market is intensifying, especially in the electric vehicle sector, where Japanese automakers are facing a serious decline in sales. So far, Nissan's overseas investment has been concentrated in Chinese Mainland, and the internal voice about shrinking the production capacity in China is growing.
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