TOKYO -- Japanese automobile manufacturer Nissan Motor announced on Tuesday that it will discontinue vehicle production at its flagship Oppama plant by March 2028, in a move that its CEO described as both essential and a cause of "significant pain".
Both current and future models scheduled for production at Oppama will be produced at Nissan Motor Kyushu in Fukuoka prefecture in western Japan, as part of the company's restructuring efforts.
The Oppama plant, which is located in Kanagawa prefecture, south of Tokyo, has around 2,400 employees.
The company also announced plans to end production at its subsidiary Nissan Shatai's Shonan plant, which is also located in Kanagawa prefecture. This follows a decision to stop placing manufacturing orders with the subsidiary for its multipurpose vehicle NV200 in the fiscal year ending March 2027.
Nissan CEO Ivan Espinosa said in a statement, "Today, Nissan made a tough but necessary decision. It wasn't easy -- for me or for the company -- but I believe it's a vital step toward overcoming our current challenges and building a sustainable future."
Those currently working at the plant will remain employed until March 2028, the company said. It added: "To address concerns regarding employment and work arrangements beyond that point, the company will establish clear policies, communicate them to affected employees and initiate discussions with the union promptly once decisions are finalized."
The company estimates that shifting production to Kyushu will reduce its manufacturing costs by about 15%.
Nissan's current utilization ratio in Japan is about 60%, Espinosa said at a press conference on Tuesday. He added that the company is "aiming to reduce fixed costs while increasing plant utilization rates to 100%."
He said, "This restructuring involves a detailed analysis of regional sales volumes, product lineups and production capacities with a focus on fundamentally transforming our cost structure and ensuring flexibility in response to external environmental changes."
He acknowledged the impact of the decision on suppliers, saying that, "We are going to discuss individually with each of them."
Nissan has not decided how the Oppama plant will be used in the future. But the company has reportedly been in talks with Taiwan's Foxconn about making use of the factory.
Espinosa said, "In terms of future utilization [of the Oppama plant], we are discussing with several partners". He said the company would look at "different scenarios and alternatives for repurposing of the assets" including the sale of the plant. He added, "What I can tell you is [that] we are not engaging in any joint ventures or contract manufacturing discussions with any external party."
Nissan drew up its Re:Nissan business restructuring plan in May. This called for the elimination of 20,000 jobs and a reduction in the number of assembly plants to 10 from 17 worldwide by March 2028. This followed a net loss of 670.8 billion yen ($4.6 billion) for the fiscal year ended March 2025.
Through its Re:Nissan restructuring plan, the company plans to reduce annual non-China manufacturing capacity to 2.5 million vehicles from the current 3.5 million.
Espinosa said that aside from the Oppama and Shonan plants, "there would be no other reduction or consolidation of vehicle production sites in Japan under Re:Nissan." Reductions of operations or consolidation in other countries will be announced "at an appropriate time as decisions are made."
The Oppama plant opened in 1961, making Note and Note Aura compact cars. According to Tokyo-based automotive research company MarkLines, the plant has an annual production capacity of 240,000 vehicles.
The company said in its release, "Other facilities and functions in the district -- such as the Nissan Research Center, Grandrive, the crash test facility and Oppama Wharf -- will remain unaffected and continue operations as usual."
.jpg?width=178&fit=cover&gravity=faces&dpr=2&quality=medium&source=nar-cms&format=auto&height=100)
