Nissan, Toyota slash Japanese production

NISSAN will scale back production in Japan by 15 per cent from next month in response to high labour costs and the impact of the strong yen on exports.

The decision from Japan’s second largest car-maker will see domestic annual output fall from 1.35 million vehicles to 1.15 million, with the company expecting to produce 1.22 million units by the end of this financial year on March 31, 2013.

According to a report from the Nikkei business daily, the company will suspend production at one of its two production lines at the Oppama factory, which produces models including the Note and current Tiida.

The suspended line will be turned into a prototype line designed to support the launch of operations at plants in emerging markets, with the company planning on ramping up output in emerging markets like China, Brazil and Russia.

The car-maker said no jobs will be lost as a result, with affected staff to be re-allocated.

The decision to cut production in its home market comes just a month after Nissan posted a ¥545.8 billion ($A6.8 billion) operating profit for the previous financial year, on the back of a record 4.8 million vehicle sales globally.

The production cuts are unlikely to affect the local market, since Nissan Australia sources the Tiida from Thailand, while the next-generation version – to be badged here as the Pulsar – will also be Thai-built.

The announcement from Japan’s number two car-maker came just one day after the country’s number one – Toyota – said that it would cut domestic production by more than 10 per cent from current levels to about 3.2 million units annually by 2014.

The company will gradually cut its annual domestic production by 400,000 units to 3.2 million while increasing output from other global facilities due to high manufacturing costs at home, according to AFP.

The decision follows an earlier move to slash the capacity of its Shizuoka factory by 100,000 units annually.

The company’s annual Japanese production capacity peaked at around 3.9 million vehicles, before the global financial crisis hit in 2008, according to the Nikkei.

Toyota’s profit dived 31 per cent to ¥283 billion ($A3.54b) in the 2011-12 financial year ending March 31, 2012.

Yesterday the company’s Australian subsidiary announced a $32.6 million loss for the financial year as a result of natural disasters, the high Australian dollar hurting exports from its Altona plant and the one-off costs associated with the lay-off of 350 workers announced in January this year.