The Nissan Frontier and Rogue will see massive production cuts in response to having too much supply on dealer lots.
Nissan Frontier, Rogue production cuts
According to a September 5 email obtained by Automotive News, Nissan plans to reduce the output of the Rogue and the Frontier pickup by up to 40,000 vehicles in September and October. These models have been essential to Nissan’s U.S. sales, accounting for nearly 40% of its sales in the first half of 2024. The Rogue alone represents 31% of Nissan’s U.S. volume.
Nissan’s spokesperson, Kyle Bazemore, confirmed the production cuts to Automotive News, citing the need to manage inventory levels for core models. The company has faced issues with excess inventory in the past year much like Jeep has done cutting production recently. Data from Cox Automotive shows that at the end of 2023, Nissan had a 106-day supply of vehicles, 50% higher than the industry average of 70 days. At that time, Nissan had the highest inventory among full-line brands.
The automaker has since made efforts to reduce its inventory levels, largely by offering significant incentives. In August, incentives on Nissan vehicles reached 12% of the average transaction price, far above the industry average of 7.2%. This helped bring the company’s inventory down to an 83-day supply by the end of the month, aligning more closely with the national average of 81 days. However, inventories remain high for the Rogue, with an 89-day supply, and even higher for the Frontier, at 111 days.
In a separate memo to suppliers on August 28, Nissan detailed further production cuts at its U.S. manufacturing plants in Smyrna, Tennessee, and Canton, Mississippi. The production schedule for the Rogue at Smyrna was reduced to four days a week, a reduction that will continue through October.
Similarly, the Frontier assembly line at the Canton plant will operate one day less per week until the end of March 2025. The Canton facility, which produces the Frontier and one other nameplate, has been underutilized. Designed to manufacture 410,000 vehicles annually, the plant’s capacity was reduced to 270,000 earlier in the decade. In the fiscal year ending in March 2025, the plant is forecasted to produce 210,153 vehicles.
EV demand softens
Nissan is also grappling with softening demand for electric vehicles (EVs), which has led the company to pause plans to build next-generation EVs at the Canton plant. A $500 million overhaul of the plant for this purpose has also been delayed. These latest cuts follow a similar reduction in the first quarter of 2024, when Nissan reduced its U.S. production by 6%, or about 10,200 vehicles. The Rogue accounted for more than half of that reduction.
Despite these efforts, Nissan dealers argue that production cuts alone are insufficient to address broader challenges. In the first half of 2024, U.S. dealership profitability dropped to its lowest level in nearly 15 years, with about 38% of Nissan’s 1,071 dealerships losing money. Some dealers believe that Nissan lacks an effective incentive strategy to boost demand for models like the Rogue, particularly its base S trim, which has not seen discounts. Instead of focusing on boosting sales, some dealers feel that Nissan is merely scaling back production.
The bottom line
With the supply rebounding on dealer lots, production cuts like this one are going to become more common as automakers balance supply and demand needs. This should be good for consumers who could get a better deal on a vehicle that has too much supply.
Comments are closed