As it battles with sluggish U.S. demand for its ageing line-up, Nissan lowered scheduled production by a third at its top Japanese factory this month. According to two individuals, this move will also see Nissan reduce output of a premium crossover model.

The Japanese carmaker highlighted the growing danger it confronts in its biggest market on Thursday by reporting an almost total wipe-out in April to June earnings and lowering its full-year estimate after being forced to provide steep discounts in the United States.

Since Nissan doesn’t sell hybrid models in the United States, unlike competitors Toyota and Honda, the company hasn’t benefited from the recent spike in demand for hybrids among American consumers as their excitement for EVs has waned.

The automaker currently intends to build less than 25,000 cars this month at its facility in Kyushu, southwest Japan, according to two individuals with direct knowledge of the matter. Due to the confidentiality of the material, both parties declined to be named.

There were no comments on the issue available from Nissan.

The sources stated that the business had originally intended to build half as many of the popular car this month as it would have made, but now intends to make about 10,000 of the Rogue crossover for export at the facility.

Nissan also produces Rogue vehicles in Smyrna, Tennessee, in addition to Kyushu.

One of the persons stated that because of the reduced productivity, line workers in Kyushu were now only working just over seven hours a day instead of the customary eight.

According to a second source, Nissan was left with an excess of 2023 Rogue cars in the United States, which was becoming more difficult to sell when the 2024 model was introduced.

According to the source, it had to be proactive in offering incentives to get rid of the 2023 model while being cautious in aggressively pushing the higher-margin 2024.

Nissan said in March that it will introduce thirty new models over the following three years with the goal of increasing worldwide sales by one million cars while reducing expenses to increase profitability.

It sold almost 3.4 million cars worldwide in 2023, a 5% increase over the previous year.

According to Tokai Tokyo Intelligence Laboratory analyst Seiji Sugiura, the goal could already be out of reach.

“Even if Nissan tries to sell luxury or expensive cars, it doesn’t have that kind of brand power in the United States. You can see that when you look at the prices of used cars,” he said. “They have to give discounts, they have to sell with incentives.”

Nissan has been caught off guard by not providing hybrids in the American market, instead assuming that American buyers would prefer gasoline-powered vehicles or electric vehicles, even though the company only sells two EVs there. That will probably keep weighing.

Analysts at Goldman Sachs stated in a letter to clients that “the overall U.S. market is seeing a shift in demand towards hybrids,” adding that it wasn’t expected that Nissan would introduce its hybrid vehicle in the country until 2026.

According to Nissan, 16 of its 30 future models—eight EVs and four plug-in hybrids—will be electrified.

CEO Makoto Uchida declined to provide a timeframe for the company’s plans to enhance its lineup in North America, including the addition of plug-in hybrid vehicles, at a briefing on Thursday.

According to Goldman Sachs, it will take “some time” for the stock market to take into account the company’s projected margin improvement based on new models.

Nissan now has 640,000 automobiles in stock worldwide, the most in almost four years. For an automobile manufacturer already coping with years of declining market share in China, the situation of its U.S. company adds another layer of complexity.

Nissan’s two largest markets are the United States and China. With the emergence of strong new competitors in China, such as BYD, the Japanese manufacturer may find itself even more dependent on the United States as opportunities in China decline.

(Adapted from ManilaTimes.net)