March 18, 2020 / 11:26 AM / 15 days ago

Nissan to stop producing cars in Indonesia as part of reorganisation plan

TOKYO, March 18 (Reuters) - Nissan Motor Co on Wednesday said it would stop producing vehicles in Indonesia, consolidating its global production in the face of falling sales which has pummelled its profitability and threatened its survival.

The decision to stop production at the West Java plant, which made its struggling Datsun compact cars, was part of a plan for “rightsizing, production optimization and reorganizing of business operations, Japan’s No. 2 automaker said in a statement.

Nissan has warned that production cuts, which would result in plant closures, would be needed to accelerate cost-cutting and rebuild profits. The 86-year-old Japanese giant posted its first quarterly net loss in nearly a decade last month and slashed its annual profit forecast.

Years of heavy discounting on its vehicles to grow market share tarnished the brand’s image and sent sales into a freefall, and pressure is mounting on Nissan and its new CEO Makoto Uchida to deliver a sustainable recovery plan in May.

The automaker has been in turmoil since the arrest and sacking of long-time leader Carlos Ghosn in late 2018, and is trying to rebuild its partnership with France’s Renault . (Reporting by Naomi Tajitsu Editing by Chizu Nomiyama)

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