Nissan Motor is set to produce electric vehicles for its Chinese joint-venture partner Dongfeng Motor at its Wuhan factory by the end of the year, reported the Nikkei newspaper on Tuesday.
This move is seen as a strategic response to the challenges facing Nissan’s China business, aiming to reduce fixed costs and boost the factory’s operating rate, which has been affected by declining sales.
The joint venture between Nissan and Dongfeng already manufactures the Ariya EV and the X-Trail SUV at the Wuhan plant, which has an annual production capacity of 260,000 vehicles. The factory will soon begin production of Dongfeng’s new Zhiyin EV under its Voyah brand, according to Nikkei.
In response to queries, neither Nissan nor Dongfeng immediately provided comments on the development.
Nissan’s decision comes at a time when the company and its Japanese rival Honda Motor are facing challenges in China due to a shift in consumer preferences towards lower-priced, feature-rich cars produced by local brands such as BYD.
This trend, coupled with the rapid expansion of battery-powered vehicles by Chinese automakers, is not only impacting Nissan and other Japanese automakers in China but also poses a growing challenge in other regions, including Southeast Asia and Europe.
Nissan operates eight factories in China through its joint venture with Dongfeng and recently halted production at one of its plants.
