Nissan Motor Co. will shutter its CIVAC Plant in Cuernavaca, Morelos, Mexico in March 2026 as part of its fast-track cost-cutting plan to return to profitability by FY2026, the automaker announced Tuesday.
The automaker said it will consolidate Mexico vehicle production to its complex in Aguascalientes where it operates two factories. Nissan said its action centralizes its manufacturing and allows it to leverage state-of-the-art equipment to drive production and logistics efficiencies.
“Today, we have made the difficult but necessary decision that will allow us to become more efficient, more competitive, and more sustainable,” CEO Ivan Espinosa said in a statement.
The CIVAC Plant was Nissan’s first production facility outside Japan and operated continuously for more than 60 years.
The decision to close a plant in Mexico follows the company’s July 14 announcement to shutter a factory in Oppama, Japan by the end of FY2027.
Shrinking its manufacturing footprint is part of Nissan’s strategy to cut costs and boost profits. The company’s goal is to slash its global manufacturing facilities from 17 to 10 by FY2027 and reduce global production from 3.5 million units (excluding China) to 2.5 million units while maintaining 100% plant utilization.
During the automaker’s quarterly earnings call on Wednesday, CFO Jeremie Papin said he was encouraged by the progress of Nissan’s turnaround plan, but added that “the magnitude of our challenge remains significant.” Nissan projects its plan will lead to 500 billion yen ($3.4 billion) in savings by FY2026.
Nissan reported a FY2025 Q1 operating loss of $79.1 billion yen ($530 million), while its net income loss was 115.8 billion yen ($775.6 million).
Global retail sales fell 10.1% year over year. Nissan’s North American sales fell 2.4% YoY while sales in China tumbled 27.5% from a year ago, where the automaker faces growing competition.
Papin said tariffs impacted its U.S. sales where the automaker prioritized selling domestically built vehicles.
Papin said the company projects to sell 3.25 million units globally during its current fiscal year, which would translate to a 2.9% YoY decline. He expects a steep sales drop in China where Nissan is forecasting an 18% decline and flat growth in Japan, North America and Europe.
Espinosa said the company recognizes its recovery is a two-year plan that will take time to show results.
“Fiscal 2025 is our transition year—the year in which we are taking decisions as we simultaneously execute actions,” he said during Wednesday’s earnings call. “These actions are being delivered in structured phases, each with clear milestones and accountability.”
