Nissan cuts petrol-car output in China amid faster electrification

China sales fall 32% as Nissan lowers annual vehicle forecast

Nissan said it would cut production of petrol cars in China and increase output of battery-electric vehicles and plug-in hybrids as sales of electric and hybrid cars accelerated in the world’s biggest automotive market amid a price war. The automaker also lowered its annual sales forecast, citing weaker demand and intensifying competition in China.

The Japanese carmaker expects to sell between 2.97 million and 3 million cars this year, down from a previous forecast of 3.15 million, mainly because of struggles in China. Nissan Chief Executive Ivan Espinosa said: “China remains our biggest challenge. Demand is weaker, competition is intensifying, and the shift to new energy vehicles is happening faster than expected. The market is being very, very harsh.”

China’s government gave subsidies to its electric-car industry as it sought an opportunity to overtake other countries such as Germany, Japan and the US, which had dominated sales of internal-combustion-engine cars. The Guardian said the policy produced a large number of Chinese EV competitors now chasing a shrinking market.

Nissan said sales across China fell by 22% in the first half of the year. The company added that pressure “intensified from July through October,” leaving sales down 32% in the first nine months.

Espinosa said Nissan’s product lineup in China, led by the Sylphy family of saloon cars, was too heavily associated with petrol engines. The company was cutting local production, exporting some products and trying to ramp up its N-series of electric or plug-in hybrid models. Plug-in hybrids combine a smaller battery with a petrol engine.

Nissan reported increased sales in its home market of Japan and in North America, where the shift to electric cars has been much slower. The Guardian cited policy decisions, including Donald Trump’s move to scrap incentives for battery-car makers, as part of that divergence, and said it leaves many global carmakers trying to keep selling more profitable petrol and diesel cars while risking being left behind by newer Chinese rivals.

Meanwhile, Nissan has been among the manufacturers slowing the shift to batteries in Europe. In the UK, the carmaker has lobbied to weaken the zero-emission vehicle mandate, a target for increasing EV sales, and to continue selling petrol cars after 2035.

That lobbying came despite evidence of rising demand for electric cars in the UK, particularly since the Iran war pushed petrol and diesel prices higher. Data from the same week showed sales of used electric vehicles rising much faster than petrol cars. Ian Plummer, chief customer officer at the car-sales website Autotrader, said: “The standout trend in the used car market is the rapid rise of retail sales of electric vehicles, up an eye-popping 56% year on year in October and now accounting for one in 10 retail sales on Autotrader.”

Nissan’s only European factory is in Sunderland in northern England. Espinosa said he was hopeful that products from Sunderland and Japan would be included in proposed “Made in Europe” rules from the EU.

The rules as drafted would exclude all Nissan cars from subsidies and other incentives within the EU, adding to the pressure on the carmaker. The company’s production plans now differ sharply by region: China is driving a faster shift toward new energy vehicles, while Nissan is seeking to slow battery adoption in Europe.