Nissan drops plan for Fukuoka battery plant to focus on recovery

[TOKYO] Nissan Motor has abandoned plans to build a battery plant in Fukuoka, Japan to focus its resources and funding on rescuing itself from a deepening financial crisis.

The Japanese carmaker announced plans late last year to invest 153 billion yen (S$1.4 billion) in a new factory in the southern city of Kitakyushu, where it would manufacture lithium iron phosphate batteries commonly used in electric vehicles (EVs).

That plan has now been scrapped, a spokesperson said on Friday (May 9), for the sake of “investment efficiency” as Nissan looks to recover its performance.

Nissan’s woes surfaced in earnest last November, when it announced plans to cut 9,000 jobs and slash production capacity by 20 per cent following another weak quarter in which it saw first-half net sales drop 94 per cent.

Weeks later, it penned an agreement with Honda Motor to combine both brands under a single holding company, essentially handing Nissan a lifeline, but disagreements over the inherent power imbalance led the partnership to end formally in February.

The absence of competitive EVs in Nissan’s lineup was a major factor in its decline, as was a dearth of attractive hybrids even as their popularity surged in the US.

Now, the company is betting on a broad restructuring and new leadership team helmed by chief executive officer Ivan Espinosa, who took office in April and pledged to turn things around.

In April, on the sidelines of the Shanghai autoshow, Nissan said it was going to pour US$1.4 billion into its China operations and use the nation’s intensely competitive market to accelerate its own development of EVs.

Nissan is due to announce on May 13 its full-year results for the 12 months ended Mar 31. Last month, it warned it will post a net loss of as much as 750 billion yen – a record annual deficit – on restructuring charges. BLOOMBERG