The decision stems directly from the U.S. administration's imposition of a 25% levy on vehicles manufactured overseas, a policy move that has sent ripples through the industry, forcing manufacturers to reassess long-standing production and sourcing strategies. Nissan, Japan's third-largest automaker, finds itself particularly exposed due to its significant reliance on the U.S. market, which accounted for over a quarter of its global vehicle sales last year. A substantial portion of these vehicles sold in the U.S. are imported from Nissan's manufacturing hubs in Japan and Mexico.
Specifically, Nissan intends to decrease the output of the Rogue SUV by approximately 13,000 units at its plant in Kyushu, southwest Japan, between May and July. This planned reduction represents a notable figure, equating to more than one-fifth (over 20%) of the 62,000 Rogue vehicles sold in the United States during the first quarter of this year.
The operational impact at the Kyushu plant, Nissan's largest manufacturing site, will involve reduced working hours for employees and halts in production on certain days during the May-July period, the source indicated, speaking on condition of anonymity as the plans are not yet public. Despite these adjustments, the plant is expected to maintain its two-shift-per-day operation for the time being. Nissan plans to continually evaluate the production schedule and make further adjustments based on the evolving tariff situation and market conditions.
Adding a layer of uncertainty, U.S. President Donald Trump mentioned on Monday that he was considering modifications to the auto levy, acknowledging that automakers might "need a little bit of time" to adapt.
In an official statement, Nissan acknowledged the dynamic environment: "Nissan is reviewing its production and supply chain operations to identify optimal solutions for efficiency and sustainability," the company stated. "We are committed to adapting to market changes while prioritizing our workforce and production capabilities. Our approach will be thoughtful and deliberate as we navigate both immediate and long-term effects."
The Rogue SUV holds significant strategic importance for Nissan in the American market. Last year, it was the brand's top-selling vehicle in the U.S., with nearly 246,000 units sold, representing more than 25% of the company's total vehicle sales in the country. To serve this demand, Nissan also manufactures the Rogue at its facility in Smyrna, Tennessee.
Interestingly, this move to cut Japanese production follows a recent reversal of plans at Nissan's U.S. plant. Earlier this month, the company decided not to proceed with a previously scheduled reduction from two shifts to one for Rogue production at the Smyrna facility, opting instead to maintain the higher output level stateside. This suggests a potential strategic shift favouring domestic U.S. production where feasible in light of the tariffs.
Nissan is not alone in recalibrating its operations. Other global automakers are also scrambling to adapt to the tariff landscape. Stellantis, the parent company of Chrysler, recently announced production pauses at plants in Mexico and Canada, which impacted related U.S. facilities and led to temporary layoffs for around 900 U.S. workers. Similarly, Honda has reportedly decided to produce its next-generation Civic hybrid model in Indiana rather than Mexico, likely to mitigate potential tariff impacts.
These tariff-related adjustments come at a time when Nissan was already undergoing a significant restructuring effort. Even before the new levies, the company had outlined plans to reduce its global production capacity by 20% as part of a broader turnaround strategy under new CEO Ivan Espinosa. The automaker faces considerable pressure to improve performance, particularly in the competitive U.S. market, where an aging product lineup and a relative lack of hybrid offerings have impacted sales. Nissan revised its profit outlook downward three times during the recently concluded financial year, underscoring the challenges it faces.