Nissan is closing two production plants in Mexico

Following the report of a massive financial loss earlier this year, Nissan is once again in restructuring mode. Its primary problem is excess production capability after earlier expansion. The first move was to close a manufacturing plant in Oppama, Japan. Now the car maker is set to shut down two assembly plants in Mexico. One of these is a joint venture with Mercedes-Benz.

Automotive News reports that a plant just outside of Mexico City that makes Navara and Frontier utes will close by March 2027.

The other being shuttered is the JV plant shared with Mercedes-Benz. It should close by early next year. There Nissan produced a pair of Infiniti SUVs and the Mercedes GLB. Production of the utes will move to two other factories it has in central Mexico. The company plans to build around 57,000 vehicles in Mexico this year, roughly one-fifth as many as it made in 2016.

The factory shutdowns are part of Nissan’s fiscal recovery plan after declaring it was in “emergency mode” last year. It plans to scale back production facilities from 17 to 10 sites globally. And manufacturing capacity will drop by 1 million vehicles to 2.5 million per annum. Staff numbers will also drop by 20,000, most from the closure of manufacturing facilities.

The plant outside of Mexico city produced 80,000 utes last year, and was therefore operating at barely one-third of its capacity. Autonews said the plant was ‘not cost-effective’. 

In March this year, Nissan’s half ownership of an Indian joint-venture with Renault was bought out by the French car maker, freeing up further cash flow.