Nissan to close Thailand factory as part of global restructuring

After announcing that Nissan has ended merger talks with Honda, the embattled automaker is set to continue with its turnaround plan to keep the company alive. Unfortunately for the brand, the restructuring plan to keep the lights on will involve the closure of several factories.

Speaking with investors yesterday, Nissan CEO Makoto Uchida shared aspects of the company's turnaround plan which includes the closing of three plants in the next two years, starting in Q1 2025. One of the plants included is in Thailand although the CEO did not say which plant they will close. Currently, Nissan has two factories in its facility in Samut Prakan, Thailand - one makes frame-based vehicles, while the other plant produces passenger vehicles.

The upcoming plant closure in Thailand could jeopardize Nissan Philippines Inc.'s best-selling models as some of the brand's best-selling vehicles come from The Land of Smiles. Models like the Navara, Terra, Almera, and Kicks e-Power are sourced from Nissan's Samut Prakan factory in Thailand.

Just last year, the company's best-selling vehicle was the Navara which sold 10,297 units out of the total 26,774 vehicles Nissan was able to shift in 2024. Following close behind are the Terra and Urvan which saw 5,779 new customers buying the SUV while 4,796 customers bought the people carrier in 2024.

The plant closures will essentially cut 6,500 jobs, including 2,500 global indirect employees. Meanwhile, global production capacity will be reduced by 20%. This translates from the current 5 million production units to 4 million units by fiscal year 2026. However, the cutting of global production capacity is seen to boost plant utilization ratio to 85% which will be an improvement from the current 70%.

Aside from that, Nissan also seeks to streamline its organization and processes to hasten decision-making. They will also simplify organizational layers and expand the span of control to improve decision-making efficiency. Moreover, roles and management positions will be evaluated and reclassified in alignment with business objectives under a new unified global system.

Last but not least, the company will introduce new plug-in hybrids in fiscal year 2025 and fiscal year 2026. Nissan will also refresh its current offerings as well as enhance its zero-emissions lineup with the new Leaf, an upcoming compact EV, and a New Energy Vehicle (NEV) for the Chinese market.

With Nissan heading towards uncharted territory as it goes through its restructuring, we'll be curious how the company will navigate the rough waters. More importantly, how will this affect Nissan Philippines' operations once the Thailand factory closes?