Nissan (carbuzz.com)
Cost Reduction Targets Prompt Nissan to Consider Moving Fourth-Generation Rogue Production from Tennessee to Kyushu
Nissan is reportedly weighing the relocation of its fourth-generation Rogue production from Smyrna, Tennessee, to Kyushu, Japan, due to cost-cutting pressures. The Japanese automaker has informed suppliers about its expectations for a “significant reduction” in parts pricing when the next-generation Rogue enters production in 2026. Nissan has asked suppliers to reduce costs by an average of 20%, with some suppliers facing requests for a 30% reduction. The move is driven by the fact that Nissan can build the Rogue in Japan for 20% less than in the USA.
This decision poses potential challenges for Nissan’s US operations, as the Smyrna plant is crucial for the brand, producing various models, including the best-selling Rogue, Pathfinder, Murano, and Infiniti QX60. The Smyrna facility, with around 6,700 employees, heavily relies on the Rogue, which constitutes 40% of its production. The potential relocation could impact Nissan’s US operations significantly, considering the plant’s current reliance on Rogue production.
The Smyrna facility, which also produces the all-electric Leaf, faces further challenges, as Leaf production is expected to cease in 2025, with its replacement being manufactured in Japan. To ease space constraints, Nissan may move some of the existing Rogue production to China, according to sources.
Nissan’s request for substantial price reductions from suppliers and the potential relocation of Rogue production to Japan are viewed as unusual and surprising by industry analysts. The move is seen as a response to increased unionization efforts in the US automotive industry. As the United Auto Workers (UAW) aims to unionize nonunion automakers, Nissan’s cost-cutting measures, including possible production relocation, are seen as strategies to mitigate potential increased operational expenses.
The final decision on the fate of Rogue production is expected in February, following the presentation of adjusted prices by suppliers. The move to potentially shift production to Japan could have broader implications for Nissan USA, potentially leading to the closure of the Smyrna plant, according to industry analysts.