Yet another automobile giant to quit Indian market

KOCHI: Unable to cope with a slump in sales and rising production costs, leading Japanese automobile company Nissan Motor is preparing to bid adieu to the Indian market. Japanese media reported the other day that Nissan may end vehicle manufacturing in India. However, the company has yet to make a confirmation regarding this.

There are reports that the number of manufacturing and assembly units will be reduced as part of cost reduction. In April, Renault announced it would acquire the remaining 51 per cent stake in Renault-Nissan Automotive India Private Limited. Nissan currently holds the majority stake in the company. With the acquisition of 51 per cent shares, Renault will gain full ownership of the manufacturing unit.

Nissan's vehicle production in India is declining. Only Nissan Magnite is currently being manufactured at its manufacturing unit in Tamil Nadu. With the acquisition of the manufacturing unit by Renault, Nissan will have to spend extra money to manufacture cars. So far, Nissan has spent 550 million euros (52,000 crore rupees) on its manufacturing unit in India.

Nissan was hit hard by a slump in sales and competition from electric cars in the highly anticipated Indian market. There were reports that it would be building a compact SUV, a 7-seater MPV, and an electric SUV for the Indian market.

The company aims to cut costs by 500 billion yen (Rs 28,000 crore) globally. As part of this, 20,000 employees will be laid off worldwide. Two plants in Japan and plants in Argentina, South Africa and Mexico will be closed. The number of global manufacturing units will be reduced from 17 to 10 by 2027. Nissan's operating profit fell 88 per cent to 698 billion yen ($472 million) in the last fiscal year.