Nissan Motor Co Ltd plans to move some of its manufacturing operations to Japan from North America as part of its efforts to improve profitability, the Nihon Keizai business daily reported on Sunday.
Production of two Nissan (Charts) models — the Quest minivan and the Infiniti QX56 sport utility vehicle — was expected to be relocated from a U.S. plant in Canton, Mississippi, to factories in Japan in 2008 and 2009, the paper reported.
Nissan sold 40,000 Quests and 15,000 of the Infiniti QX56 in North America in 2005, according to the report. Since both vehicles are mainly sold in North America, local production offers the company lower distribution costs, it said.
But given their small sales volumes, Nissan believes that it would be able to cut costs by producing them in Japan for export because its Japanese plants can switch between models and build them more quickly, the daily said.
Production volume at the Canton plant would remain unchanged as Nissan plans to increase the production of different pickup truck models there, it said.
Nissan officials were not immediately available for comment.
U.S. sales of the Quest are down 28 percent in first eight months of the year, according to sales tracker Autodata, as sales in the segment fell 14 percent on higher gasoline prices and more so-called “crossover” models which offer a more car-like ride with some of the features of an SUV.
The share of the shrinking U.S. minivan market for the Quest is only 3.2 percent, according to Autodata, putting it far behind segment leader DaimlerChrysler (Charts), which has 38 percent of minivan sales between its Dodge Caravan and Chrysler Town & Country models.
Nissan's Japanese competitors Honda Motor (Charts) and Toyota Motor (Charts) are have done far better in the segment with 18 percent of sales for the Honda Odyssey, and nearly 16 percent for the Toyota Sienna. The Quest sales even trail the Ford Motor (Charts), which has 6 percent but announced plans last month to essentially exit the segment.
Nissan and its alliance partner Renault are in talks with General Motors (Charts) about possibly joining their alliance. Talks are due to continue for about another two weeks, although some comments made by executives of the companies at the Paris auto show last week suggested such a tie up appears unlikely. But Kirk Kerkorian, GM's largest individual investor who announced plans last week to increase his stake in GM by up to 12 million shares, continues to push hard for such a deal.
