Possible rewritten title: Potential Consequences Loom for Tennessee Factory Producing Crossover
There are reports suggesting that Nissan is currently contemplating the idea of relocating the production of the fourth-generation Rogue from the United States to Kyushu, Japan. This decision stems from the company’s efforts to decrease its purchasing expenses.
According to sources, the Japanese car company has officially informed its suppliers about the upcoming changes in parts pricing for the next-generation crossover, set to begin production in 2026. The company anticipates a “significant reduction” in costs, which could potentially cause concern for Nissan’s operations in the United States. This is due to the fact that the Rogue, built in Smyrna, Tennessee, is currently the top-selling model for the brand in the American market.
According to Automotive News, Nissan has requested its suppliers to lower the price of components by an estimated 20%. Some suppliers have been specifically asked to slash prices by up to 30%. This decision by the automaker is motivated by a desire for greater cost efficiency. In Japan, Nissan is able to produce the Rogue model at a significantly lower cost, approximately 20% less than its production costs in the United States.
Nissan USA has successfully trimmed 18% of its internal manufacturing expenses, but it seems that this achievement still falls short.
According to an anonymous supplier who attended the meeting, it was stated that production would be relocated to Japan if the cost cannot be reduced to match that of Japan’s.
As previously stated, this choice may have a negative impact on the company’s US branch. Located in Tennessee, the factory produces several designs such as the fully electric Leaf, Pathfinder, Murano, and Infiniti QX60. In the previous year, production of the Nissan Maxima was discontinued by the brand.
The production of the Rogue is vital to the survival of the Smyrna facility, as it employs approximately 6,700 individuals. In fact, a significant 40% of the factory’s total production comes from the manufacturing of the Rogue. However, things are not looking favorable for the facility, as the upcoming end of Leaf production in 2025 adds to its woes. The new model replacing the Leaf will no longer be produced at the Smyrna facility but instead in Japan.
According to informed insiders, AN learned that Nissan is considering creating more room at their Japanese factory by transferring some of the current Rogue manufacturing to China.
Nissan has asked suppliers to provide updated quotes for the upcoming Rogue model. The company’s North American division will then present these revised prices to top Nissan officials by the end of the month. A decision about the future of the Rogue is expected to be made in February, meaning an announcement can be expected soon.
According to one source, the fact that Nissan was able to transfer a portion of their Japanese production to China came as a surprise to suppliers. The source stated, “Initially, it was seen as an empty threat that Nissan could handle all of the US Rogue production in Japan. However, if they are actually increasing their capacity, that changes the situation entirely.”
Experts in the automotive industry suggest that Nissan’s decision to significantly lower prices may be connected to the recent rise in unionization efforts. After the United Auto Workers (UAW) reached tumultuous agreements with the three biggest automakers, the union announced its intentions to organize thousands of employees at non-unionized car companies nationwide.
Nissan has made efforts to prevent this issue by providing a 10% raise to its employees at production facilities in the United States.
Nissan is currently facing the challenge of rising operational costs and is determined to find solutions to minimize expenses. However, the approach taken by the Japanese company has raised eyebrows among industry experts. According to Daniel Rustmann, co-chair of Butzel Long’s global automotive practice, the magnitude of price reduction requested by an OEM and the threat of relocating vehicle production to a different country is unprecedented.
In the words of Sam Fiorani, Vice President at AutoForecast Solutions, “Nissan’s Smyrna and Canton, Mississippi factories currently use 52% of their combined volume.” In an interview with Automotive News, Fiorani expressed concern that if Rogue production were to be relocated to Japan, it would result in financial difficulties for Nissan USA. He went on to say, “Closing a plant could be in Nissan’s future.”