Confirming months of rumors, Nissan said it will end production of commercial vans – like the NV200 – at plants in the U.S. and Mexico next year, a move that comes as part of a broad cost-cutting program aimed at helping the troubled Asian automaker reverse recent losses.
The move puts an end to an aggressive program Nissan launched following the Great Recession, when it launched production of its full-size vans at its Canton, Mississippi assembly plant. The pullout also will impact production at the sprawling Nissan manufacturing complex in Cuernavaca, Mexico.
The automaker hoped to carve out space in a market segment traditionally dominated by Detroit’s Big Three – and even supplied some of its vans, for a few years, to General Motors. But vehicles like the NV200 simply failed to catch on and Nissan is now paring back to its core product lines.
The second-largest of the Japanese automakers has been struggling to reverse a series of setbacks that led it to announce its worst loss in two decades during the fiscal year that ended on March 31, a deficit of 671 billion yen, or $6.2 billion. It expects to post another loss during the current fiscal year though Chief Executive Officer Makoto Uchida told reporters during the Beijing Motor Show last month that he plans for Nissan to be back in the black during the fiscal year ending March 2022.
The coronavirus pandemic is only one of the challenges Nissan is struggling with. The company has been in crisis mode since November 2018 when former boss Carlos Ghosn was yanked off his corporate jet after landing at Tokyo’s Haneda Airport and accused of various financial crimes.
Since then, Nissan has undergone a series of shakeups in upper management. Further complicating matters, the automaker has been struggling to reverse some of Ghosn’s less successful policies which saw spending mushroom even while delaying or cutting key product programs.
The company is now rushing to update its various core product lines, with the Rogue and Sentra two critical moves. It also is launching a much-needed companion to its Leaf battery-electric hatchback, the new Ariya SUV. The Infiniti brand also is readying a major product program.
However, Nissan is also looking to shed itself of weaker products, starting with its commercial vans to focus on core models like the aforementioned Sentra and Rogue. “Success in North America is critical to the Nissan NEXT transformation plan, and we are concentrating on our core business and products,” said Michael Colleran, senior vice president, Nissan U.S. Marketing & Sales.
In a statement, the automaker said sales of the vans will continue through the end of 2021, or until the available supply “is exhausted.”
When Nissan launched production of the NV series in Canton in 2011, the company had big aspirations for its commercial operations. It helped to line up a partnership with GM which sold a version of the NV200 as the Chevrolet City Express. But demand never reached target levels, especially after the Chevy tie up ended in 2018.
Last year, Nissan produced just 37,000 vans at the North American plants, about 15,000 of them in Canton. The full-size van achieved a meager 4.9% market share, according to industry data, compared with 48.6% for Ford and 24.9% for GM. The NV200, Nissan noted, did do a bit better, with 23% of the compact commercial van segment.
Complicating matters has been the weak demand for Nissan’s Titan pickup which failed to gain much traction even after a major makeover a few years ago. There continue to be questions about whether Nissan will continue to produce the truck – and, if so, whether it will try to expand the range of variants offered, something analysts say would be critical to gaining more market share.