According to foreign media reports, Nissan is negotiating with Foxconn Group, a Taiwanese company, to hand over a factory in Japan that is on the verge of closure to the electronics foundry giantElectric vehicle, as part of Nissan’s restructuring plan.
A Nissan insider revealed that the potential collaboration involves Nissan’s Oppama plant in Yokosuka City, Kanagawa Prefecture, south of Tokyo. As of the end of October last year, the plant had about 3,900 employees. In light of Nissan’s large-scale restructuring plans, local governments, including Kanagawa Prefecture, have expressed concerns about the plant’s future.
Image source: Nissan Motor
Partnering with Foxconn could allow Nissan to keep the plant and its employees while reducing costs. Foxconn (officially Hon Hai Precision Industries) plans to produce its own brand electric vehicles at its Oiba plant, while Nissan intends to leave it idleCapacityOpen to the Apple foundry giant, thereby improving the overall capacity utilization rate of the factory.
Foxconn has rapidly expanded its production business related to electric vehicles through overseas joint ventures. In 2024, Foxconn invested in the acquisition of the German auto parts giantZF(ZF) 50% of the shares of a chassis subsidiary. Foxconn and Nissan are also considering forming a joint venture to jointly operate the Oi Hama plant.
Nissan announced in May that it plans to reduce the number of final assembly plants worldwide from 17 to 10. According to people familiar with the matter, among Nissan’s five production bases in Japan, the Oihama plant and another affiliate’s factory in Kanagawa Prefecture are on the list of potential integration.
The Oiba plant was put into operation in 1961 and is one of Nissan’s main plants, with an annual production capacity of 240,000 units, but the plant’s capacity utilization rate has been low due to weak sales at Nissan. According to research firm MarkLines, the plant’s utilization rate was only 40% last year, well below the break-even point of 80%.
However, if the factory is closed and layoffs are required, Nissan will bear high costs. In addition, many parts suppliers associated with Nissan are located near the plant, and retaining the plant also helps maintain the company’s supply chain.
The 170-hectare Oihama plant houses an important test site and crash test track, as well as a research center and a terminal for car carriers. The closure of the plant will force Nissan to build new test tracks and facilities elsewhere, which may affect the development of new models and, in turn, subsequent sales increases.
Foxconn officially announced its entry into the electric vehicle field in 2019, adopting a business model of contract design and manufacturing. The company has been looking for a suitable production site in Japan.
In May this year, Foxconn signed a strategic cooperation memorandum with Mitsubishi Motors to supply electric passenger car products to the latter. At the same time, the company is pursuing a commercial agreement to supply electric buses to Mitsubishi Fuso Truck and Bus Company. If the Ohama plant can be built into a production base, it may help Foxconn deepen its cooperative relationship with Japanese car companies.
Foxconn has privately expressed its intention to cooperate with Nissan. In December last year, Honda and Nissan began merger negotiations, and Foxconn’s potential participation is also to cooperate with Nissan.
However, the Japanese government is cautious about Foxconn’s involvement in Nissan management, but if cooperation can protect jobs, it will be easier to obtain government recognition.
In response to the above news, Nissan said in a statement that the report was not based on information officially released by the company. A Foxconn spokesperson did not immediately respond to a request for comment.