Barcelona loses! Nissan South Africa’s gain

Nissan South Africa expects to begin commercial production of the new Navara bakkie in January 2021.

Scenes unfamiliar to Europeans, but very familiar to South Africans, unfolded at the Barcelona, Spain Nissan plant earlier this year when the company announced a radical global restructuring. Hundreds of masked workers burning tyres and shouting “war” blockaded Nissan’s Barcelona plant after the Japanese carmaker announced it would shut the plant from December 2020 as part of a global restructuring plan to slash costs.

The decision is a blow for Spain at a time when unemployment is spiking and a steep recession is looming because of the coronavirus crisis, and the main opposition party criticised the leftist coalition government for failing the Nissan workers.

The closure of the plant and several facilities nearby also highlights the challenges carmakers face as they try to cut costs and revive demand following the global health crisis. Renault and Mitsubishi Motors said at the same time that they were reorganising their global production to save costs and become more efficient.

The new Nissan Navara to be manufactured in the Rosslyn plant

The plant and the nearby facilities employ 3 000 workers and the closures could indirectly affect up to 25 000 jobs, unions say. The car industry accounts for about 10% of Spain’s gross domestic product, according to producer’s association ANFAC.

Barcelona’s loss is Rosslyn’s gain
Nissan invested R3 billion in the Rosslyn factory last year, with the Navara future in mind. The validity of this strategy is now crystalising, as Nissan’s decision to allocate South Africa funding for an assembly line upgrade, clearly showed that plans were afoot for rationalising its European bakkie production assets.

Nissan’s restructuring is part of a broader reorganisation of the uncomfortable alliance with Renault and Mitsubishi. All three companies have committed to significant badge engineering in future, with brands taking precedence is specific regions.

Mitsubishi will be given responsibility for the ASEAN and Oceania region. Renault takes control of Europe, Russia, South America and North Africa. Spearheading the alliance in China, Japan and North America, will be Nissan.

So where does South Africa figure in all of this? Good question. Nissan and Renault are both strong sellers locally, but the Japanese brand has bakkies, and those are good as gold for any automotive brand wishing to trade in South Africa.

Inside the Nissan Rosslyn factory

The bolstered status of Rosslyn as a Nissan global production asset will also give the Japanese possible precedence over the French when it comes to an alliance presence in South Africa.

Nissan said it would slash its production capacity by a fifth to help reduce its fixed costs by 300 billion yen (R48.7 billion) as it looks to become smaller and more cost-efficient after posting its first loss in 11 years.

“There was no viable solution for the future of the Barcelona factory,” said a company spokesperson, adding that the two smaller Nissan plants in northern Spain would remain open.

The Barcelona plant, which has been operating since the 1980s, mainly produces electric vans and bakkies and is Nissan’s main European plant after one in northern England. Workers have been on strike since early May, staging protests after Nissan only partially resumed production following a temporary shutdown due to the coronavirus.