La guerra commerciale spinge le aziende giapponesi fuori dalla Cina, Nissan perde 5 miliardi di d…

La guerra commerciale spinge le aziende giapponesi fuori dalla Cina, Nissan perde 5 miliardi di d…

Looking at the Shanghai Auto Show, Nissan still faces the greatest risks among the three major Japanese brands. The only constant is this massive billboard. Two years ago at the Shanghai Auto Show, the biggest space at the entrance to Hall 7 was Nissan’s booth. But today, they’re sharing a very small booth with Zenzo Nissan, showing only a few cars. The model getting the most attention is N7, but the buzz is not that high. It seems like Nissan is only holding on because of its investment in advertising. Like that huge billboard behind me. As the US China trade war intensifies, Japanese firms face growing challenges in China. Media reports indicate Nissan Motor is navigating unprecedented difficulties. Japan’s Yomi Shinun reports that Nissan will cease vehicle production at its Wuhan factory in Hube province by March 2026. The Wuhan facility, once capable of producing 300,000 vehicles annually, now operates at under 10% capacity due to weak sales in China, contributing to Nissan’s worst ever financial losses. The plant will close by the end of 2025 fiscal year, March 2026. Nissan projects a record net loss of approximately 5.2 billion US for the fiscal year ending March 2025. In 2024, its China sales fell 12% to about 700,000 vehicles, half of its 2018 precoid peak, driving significant overcapacity. The Wuhan factory, a key part of Nissan’s China strategy, face severe challenges. Launched in 2022 with a 300,000 vehicle capacity, it was tasked with producing the global electric vehicle ARA and X-Trail SUV. output averaged only 10,000 vehicles annually, far below expectations. Since last year, it manufactured electric models for partner Dongfang Motor to boost utilization. But after 3 years, Nissan announced its exit. Nissan entered China in 1983 and formed Dongfen Nissan with Dongfen Motor Group. In 1994, it established multiple production bases manufacturing diverse vehicles from gas power to electric with strong performance. In 2018, sales reached about 1.4 million vehicles, ranking among the top foreign brands. In recent years, Nissan’s market performance in China has deteriorated. It closed its Chanzo plant in Jans Soo in June 2024 and announced in February a capacity reduction from 1.5 million to 1 million vehicles. Despite this, overcapacity persists with executives considering further closures. After exiting Wuhan, Nissan retains four production bases in China. To mitigate US tariff impacts, Nissan is reducing China operations while expanding US production. It’s exploring transferring some production lines from its Fukuoka Japan plant, which produces models for the US to American facilities. Production of the Rogue SUV at the Kyushu Fukuoka plant will decrease with more output shifted to US factories to avoid tariffs. Mietta, a former Nissan used car dealership employee, told overseas media, “Nissan’s performance has been poor, impacted by the pandemic and reduced production compounded by ongoing losses. Moving factories to the US raises fears of layoffs,” he added. Toyota is investing more in US plans, and Honda is shifting hybrid production there. As Japan’s key industries decline, unemployment may rise, clouding the country’s outlook. Beyond Nissan, Toyota and Honda are expanding US production. Toyota is increasing investment in American plants, while Honda is relocating production from its Saitama, Japan factory to the US. On April 23rd, Toyota announced a new production line at its West Virginia plant to assemble hybrid vehicle components, enhancing fuel efficiency and performance. Set to begin operations in late 2026, the investment totals about $88 million US. On April 16th, Honda announced it would shift production of the Civic hybrid for the US market to its Indiana plan. Currently produced at the Yori factory in Saitama, Japan with 3,000 units made from February to March. Production will end in June and move to the US Midwest. These moves signal Japan’s auto industry reducing reliance on China and bolstering US production capacity. Media observers note that Nissan’s struggles reflect broader challenges for foreign firms in China with similar cases becoming common in recent years. Reports show General Motors closed plants in Tammen Hub and Shanghai in 2021 and Ford shut its Tanzhin factory in 2022 facing issues like Nissan falling sales, fierce competition, and policy uncertainty. Business Insider reported that in 2022, GM’s China sales dropped 20% and Fords fell by 33.5% reflecting a rapid loss of market share for foreign brands. Other industries are also reducing China dependency. Semiconductor firms are building factories in Southeast Asia and India to mitigate geopolitical risks, indicating a global supply chain reconfiguration to lessen exposure to China’s market. These cases form a trend. China’s once lucrative market is becoming increasingly competitive, rendering past strategies ineffective for traditional giants like Nissan. The underlying reasons are complex and noteworthy. China’s auto market is shaped by government-driven distortions and heightened competition. Government policies significantly contribute to foreign firms challenges in China. Since the 2015 made in China 2025 strategy, substantial subsidies have boosted domestic automakers particularly and electric vehicles, enhancing firms like BYD while pressuring foreign competitors. China imposes barriers on foreign firms, including data localization, forced technology transfers, and strict market access rules, raising costs and undermining competitiveness. Policy opacity and volatility such as the 2022 zerocoid measures in the 2023 reopening hinder market predictability and long-term planning. Government campaigns promote domestic brands, prioritizing them in public procurement and using slogans like pride in national products to foster nationalism, further limiting foreign firms market space through implicit protectionism. China’s auto market, especially in new energy vehicles, is intensely competitive. Brands engage in price wars to gain market share, slashing industry profit margins while often neglecting vehicle quality. Whenever someone says domestic cars are bad and joint venture cars like the Nissan Tiana or Silfi are good, they get a lot of criticism. Don’t tell me you buy domestic cars to support the country. The owners of the domestic brands you support are all driving luxury cars, living in mansions, wearing designer clothes. They use nationalism to manipulate us, the working class, and then they make trash products to profit from us, while they turn around and buy Maybach. Meanwhile, China’s broader economic slowdown and declining consumer confidence have severely impacted businesses operating in the country. In recent years, China has faced multiple economic challenges, including risk from the real estate sector, local government debt, and the lasting impacts of its earlier zerocoid policies. The slowdown in economic growth directly affects consumer incomes and spending power. Just look at how much consumer spending has downgraded. I was on a business trip from Wuhan recently and I took a green train. This wasn’t during a holiday, but the train was packed. People were crowded in the aisles by the wash basins everywhere. I stood for 3 and 1 half hours to get into Shangyang. I used to ride this green train often, and it was never full. The high-speed train from Hango to Xiaang only takes an hour and a half, but it costs 150 yen. The old green train takes two extra hours, but only costs 50 yen. Money is so hard to earn now. People have learned to budget and spend wisely. 100 yen is enough for one person’s meals for a week. Has consumer spending really dropped this much? Do you all feel it? I sure do. As a used car dealer, I can definitely feel it. People are really waking up. No one is splurging anymore nowadays. Most of the cars we sell are under 50,000 yen. Cars priced over 50,000 just don’t sell, no matter how good the condition or how new they are. Look at cars like that Honda for over 20,000 yen, Toyota for over 30,000, or a Volkswagen for over 10,000. They’re sold as soon as they come in, even before we have time to wash them. So, are luxury cars not being chased after anymore? It’s really strange. Honestly, the downgrade in spending is very clear. Just take me for example. I used to smoke 45s, but now I’m using these and I used to eat out at least once every 3 days. Now, unless it’s a special occasion, I almost never go to restaurants. And I used to go get my feet clean at least twice a month. Now, I don’t even know what it feels like. Nissan’s sharp contraction in China, especially the short lifespan of its Wuhan factory, results from various factors, including China’s broader economic conditions and unique market dynamics, which have been decisive factors. The Japanese car market is collapsing. The situation with Japanese cars is plummeting fast. Take the Honda Accord 260 Turbo Fantasy Night Premium Edition, the most reliable model for example. At the end of last year and just last month, a 2022 model was going for over 130,000 yen, but now new ones are being sold for the same price. I have three of them. Then there’s a Mazda Atenza, the most cost-effective B-class car among Japanese cars. I have two with 2.5 engines, and no one is even bothering to open the doors. The Honda Civic, once the go-to car, now the value retention king, a 2019 luxury version, was bought for 68,800 un. And now it’s being sold at a loss with no buyers, and I still have three of them. Nissan Sophie, a reliable and fuelefficient car with cars priced in the tens of thousands, is also stuck in the shop. No one is buying. Not only Nissan, but other car brands are also experiencing tough times, according to secondhand car owners. At this point, the used car market is practically dead. Most of my colleagues in the used car business are having a terrible month, and we’re no different. That’s why we’ve decided to lower the prices of all our cars. Take this 2015 BMW X1, now selling for just over 30,000 yen. Isn’t that cheap? It’s a good deal, but if the car isn’t cheap, no one will buy it. Look at our lot with over 200 cars here and there’s no one even looking at them. In recent years, China’s economy has shifted from rapid growth to significant downward pressure. Factors include the ripple effects of the real estate market adjustments, accumulating local government debt, and the lingering impact of zerocoid policies on the economic activity and supply chains. Global economic weakness and reduced external demand have also stained China’s exports. Economic uncertainty has eroded household income expectations and consumer confidence, making buyers cautious about major purchases like cars. Many delay plans or prioritize affordability, opting for cheaper alternatives. Mid-tier joint venture brands like Nissan struggle, unable to meet luxury demands or compete with lowerpric domestic brands. Nissan sales have plummeted since 2018, reflecting weakened consumer demand. The Wuhan facto’s under 10% utilization rate underscores this sharp market contraction. China’s structural economic slowdown, fragile consumer confidence, and intense competition from domestic brands create a challenging environment for Nissan’s operations in China. The withdrawal or downsizing of foreign firms will significantly impact China’s economy. For instance, closing the Wuhan plant could result in thousands of job losses, impacting the local economy. More broadly, declining foreign investment may intensify China’s employment pressures and economic slowdown. While policies bolster domestic firms, they contribute to market imbalances and resource waste. China’s severe automotive overcapacity with many underutilized factories is worsened by ongoing government subsidies. Commentators suggest Nissan’s decision signals a shift in foreign firms views on China’s market. Increasingly, companies are reassessing investment risks and returns. For example, Apple has moved some iPhone production to India and Vietnam to reduce reliance on China. The economic advantages that once drove foreign brands growth in China are diminishing, giving way to a more complex, competitive, and uncertain economic landscape. Experts note that Nissan’s closures of the Wuhan plant reflects not only economic challenges, but also geopolitical factors. The escalating USChina trade conflict and China’s slowing economy make operations difficult for foreign firms. The automotive sector faces similar pressures. With ongoing trade tensions and policy uncertainties, foreign companies may further reduce investments in China, seeking opportunities elsewhere.

As the U.S.-China trade war intensifies, Japanese firms face growing challenges in China. Media reports indicate Nissan Motor is navigating unprecedented difficulties.
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