Nissan Prepares to Pull Out Rogue Production in U.S. Amidst High Supply Prices

Jan 25, 2024 02:25 AM EST

PHOTO OF WHITE NISSAN CAR — (Photo : PEXELS/Albin Berlin )

Nissan is considering the possibility of relocating its Rogue production out of the United States, issuing a stern warning to suppliers, demanding price reductions. This consideration raised concerns about the Tennessee factory which manufactured the crossover. Such move from Nissan as it could present significant challenges. Furthermore, Nissan is considering the possibility of moving the production of the Rogue Crossover to Japan, a decision that may significantly lower output at the Tennessee facility in Smyrna.

Nissan's Plan a Move: Rogue Production Relocation, Japan

Nissan is currently exploring a significant shift in its production approach for the fourth-generation Rogue, a highly favored crossover model within the United States. Automotive Addicts.com cited a report that , the Japanese automaker is evaluating the possibility of moving Rogue production from its Smyrna, Tennessee facility to Kyushu, Japan.

The feasibility of this prospective relocation hinges on Nissan's capacity to lower procurement expenses, as the company foresees a substantial decline in component prices when the upcoming generation of the Rogue commences production in 2026. This strategic consideration underscores Nissan's readiness to shift production away from the U.S. if cost-saving measures can be achieved.

Reports indicated that the Rogue currently constitutes nearly 40% of the total production output at the company's Tennessee plant. Since it is Nissan's best-selling car in the United States, the Rogue is very important to the company. With 6,700 employees and a 640,000 vehicle yearly manufacturing capability, the Rogue accounts for almost 40% of the facility's total output.

Moving Factor for Nissan

Nissan ready to pull out production from U.S. due to high price of supplies. In a recent gathering held at Nissan North America's headquarters, the automaker made a formal request to its suppliers for a substantial reduction in component prices, aiming for an average decrease of 20%.

Specific suppliers were even given the challenge of reducing their prices by up to 30%. Failure to meet Nissan's stipulated cost reductions could potentially compel the company to relocate all Rogue production to Japan, where it asserts that production costs are currently 20% lower than those incurred in the United States.

Moreover, as shared in reports, during a post-meeting conversation with Auto News, a supplier disclosed that Nissan had communicated their position, indicating that if suppliers couldn't align their costs more closely with those in Japan, the automaker was prepared to move production to Kyushu.

Despite Nissan USA's prior endeavors to trim internal manufacturing costs by 18%, it becomes evident that further cost reductions are imperative. In light of this, the company has conveyed to its suppliers that unless they can achieve the desired cost parity with Japan, there is a looming prospect of Nissan ready to pull out production from the U.S., with the Rogue potentially being relocated to Japan.

This underscores Nissan's preparedness to potentially shift production operations away from the U.S. if cost-saving measures cannot be met.

About Nissan Rogue Crossover

One can buy a 2024 Nissan Crossover from a base price of $ 29,85. According to Car and Driver, the Nissan Rogue has strengths such as an attractive exterior design, a smooth and comfortable ride, and a well-appointed interior. However, it falls short in terms of providing a fun driving experience and has a high-priced top-level trim. Additionally, its engine's fuel efficiency may not meet advertised claims. In their evaluation of the Rogue Crossover, Car and Driver also mentioned a few drawbacks.