Nissan is set to reduce production of its best-selling model in the U.S., the Rogue SUV, at its Japanese facility during the months of May to July. This decision is influenced by recent U.S. import tariffs, as reported by an insider who preferred to remain anonymous.
The implementation of a 25% tax on imported vehicles by President Donald Trump has significantly disrupted the automotive supply chain worldwide. As Japan’s third-largest automobile manufacturer, Nissan is particularly vulnerable, with the U.S. being its primary market, accounting for over a quarter of its sales last year. Many of these vehicles are produced in Japan or Mexico.
Nissan intends to decrease production of the Rogue by 13,000 units at its Kyushu plant in southwest Japan during this three-month span. This reduction represents over 20% of the 62,000 units sold in the U.S. during the first quarter of this year.
From May to July, employees at the Kyushu facility, which is Nissan’s largest, will face reduced work hours and intermittent production halts. However, the plant will continue to operate two shifts daily. The automaker plans to evaluate the production landscape depending on how tariffs evolve.
On Monday, Trump mentioned he was contemplating adjustments to the auto tariff, acknowledging that manufacturers “need a little bit of time.”
In a statement, Nissan emphasized its ongoing review of production and supply chain operations to enhance efficiency and sustainability. The company expressed its commitment to adapting to market dynamics while focusing on its workforce and production capabilities.
“Our strategy will be careful and methodical as we address both immediate and long-term implications,” the statement noted.
Background
The Rogue was Nissan’s most popular vehicle in the United States last year, with nearly 246,000 units sold, constituting over 25% of the company’s total sales in the country. Additionally, Nissan produces Rogue vehicles in Smyrna, Tennessee.
This recent production adjustment follows Nissan’s earlier reversal of a plan to cut output at the Smyrna facility; the company decided to maintain two shifts for the Rogue instead of reducing to one as originally planned for April.
Other automotive manufacturers are also striving to adapt to the tariffs, which Trump argues will bolster U.S. manufacturing and job growth.
Stellantis, the parent company of Chrysler, announced it is suspending operations at one plant in Mexico and another in Canada, affecting five related U.S. facilities and leading to the temporary layoff of 900 American workers.
Honda has opted to produce its next-generation Civic hybrid in Indiana instead of Mexico to bypass potential tariffs, according to reports.
Even prior to the tariff decisions, Nissan was planning to reduce its global production capacity by 20% as part of a broader restructuring initiative.
New CEO Ivan Espinosa is facing pressure to steer the company toward recovery, especially in the U.S. market, which has suffered due to an aging product lineup and limited hybrid options. In the recently concluded financial year, Nissan revised its profit outlook downward on three separate occasions.