It was reported that the Japanese automaker Nissan has announced plans to close one of its two automobile factories in Thailand this year following the collapse of merger talks with Honda on Thursday (February 13).
After the planned US$60 billion (2.02 trillion baht) partnership deal failed on Thursday, Nissan said it would reduce operating costs by covering cost management, employee layoffs and factory closures. The company is expected to cut or transfer about 1,000 jobs in Thailand.
Both of Nissan’s Thai factories are located in a single facility in Samut Prakan province. Reducing its operating costs by around 400 billion yen (87.80 billion baht) in fiscal year 2026 will enable a stable operating profit margin of 4%, the company said.
Nissan CEO Makoto Uchida said the move aims to boost efficiency in cost management, revenue growth and competitiveness to meet customer demand.
Starting with factories in Thailand and the US, the plant closures will cut Nissan’s workforce by 6,500 out of a total of 9,000 planned job redundancies. Further manpower reductions will be made among 2,500 indirect employees worldwide.
The cuts will reduce Nissan’s global production capacity by 20%, from the current 5 million units to 4 million units by fiscal year 2026. The company said they should also boost the plant utilisation ratio to 85%, from today’s 70% – at least in its manufacturing facilities outside China.
Nissan also announced plans to “simplify” its vehicle design, covering performance and content adjustment, to curb manufacturing costs and reduce parts complexity by up to 70%.
The company said it will introduce new plug-in hybrid models in 2025 and 2026, refresh its award-winning mini vehicles and large minivans, and strengthen its zero-emission electric vehicle (EV) lineup with the new Leaf compact EV and a new energy-efficient vehicle targeted at the Chinese market.
The company reported a 78% drop in operating profit and a net loss in the latest quarter amid bloated inventory, sagging sales and continued cash burn. Operating profit sank to 31.1 billion yen (6.84 billion baht) in Nissan’s fiscal third quarter ending December 31, from 141.6 billion yen (31.18 billion baht) a year earlier. – The Nation
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