Things aren’t looking up for Nissan as they continue to slash U.S. production by 17% for the 2024 fiscal year. The automaker aims to reduce output from over 605,000 vehicles in 2023 to around 503,000. This move is part of a global plan to reduce production by 20% due to oversupply, rising costs, and weak first-half 2024 results.
Major U.S. plants in Canton, Mississippi, and Smyrna, Tennessee, will be affected. Cuts will impact high-volume models like the Frontier pickup and Rogue crossover, totaling over 12,000 fewer vehicles in the second half of 2024.
The company is also reducing shifts, with some plants operating a four-day workweek to align production with market demand. These cuts come as Nissan revises its financial forecast, reducing its operating income projection by 70% and announcing a global reduction of 9,000 jobs, including a 6% cut in its U.S. salaried workforce. The company aims to save $2.1 billion in fixed costs and $703 million in variable costs.
Dealerships are feeling the pressure, with the average number of vehicles sold per dealership plummeting. Additionally, suppliers face losses on tooling investments as production is scaled back.
As inventory levels peaked at 112 days’ supply in April, Nissan has been forced to adjust production to reduce excess stock. Despite these efforts, the company’s future in the U.S. market remains uncertain. With rising costs, shrinking market share, and evolving consumer preferences, Nissan’s ability to recover will depend on its ability to adapt to these challenges while maintaining strong dealer relationships.
