Can Foxconn save Nissan's struggling Oppama plant despite Japan govt's concerns? Talks on

Nissan Motor is in talks with Taiwan’s Foxconn to allow the electronics giant to produce electric vehicles at a Japanese plant that may face closure as part of the automaker’s global restructuring, people familiar with the matter reportedly said.

The potential collaboration centers on Nissan’s Oppama plant in Yokosuka, Kanagawa prefecture, south of Tokyo. A source at Nissan confirmed the discussions to Nikkei business. The plant employed around 3,900 people as of the end of October, and local governments have expressed concern about its future amid Nissan’s plans to reduce its final assembly factories worldwide from 17 to 10.

Partnering with Foxconn, officially known as Hon Hai Precision Industry, would enable Nissan to preserve jobs and lower production costs. Foxconn aims to produce its own electric vehicles at the site, while Nissan could improve the plant’s low utilisation rate by outsourcing surplus production lines to the Taiwanese manufacturer.

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Foxconn has been aggressively expanding its footprint in the EV sector. In 2024, it took a 50 percent stake in a chassis subsidiary of German auto parts maker ZF. It is now exploring a joint venture with Nissan to use the Oppama facility, sources said.

Oppama, one of Nissan’s key domestic plants since 1961, has an annual production capacity of 240,000 vehicles. However, its utilisation rate fell to just 40 per cent last year, well below the 80 per cent typically required to break even, according to data from research firm MarkLines. Nissan’s declining global sales have exacerbated the plant’s underuse.

Closing the plant could trigger significant costs due to potential layoffs and disruptions to Nissan’s local supply chain. Many affiliated parts suppliers are located near Oppama. The site also includes essential infrastructure such as a research center, test tracks, and a dedicated wharf for vehicle shipments. Shutting it down would require Nissan to replicate these facilities elsewhere, further complicating its vehicle development efforts.

Foxconn has been seeking a manufacturing base in Japan since announcing its EV ambitions in 2019. In May, it signed a memorandum of understanding to supply electric passenger vehicles to Mitsubishi Motors and is also arranging to deliver electric buses to Mitsubishi Fuso Truck and Bus.

Using Oppama as a base could strengthen Foxconn’s ties with Japanese automakers. The company’s behind-the-scenes interest in Nissan reportedly contributed to earlier merger talks between Nissan and Honda in December.

The Japanese government has expressed caution about Foxconn gaining influence over Nissan’s management, but protecting jobs at the plant may help ease official concerns.

Nissan is grappling with sluggish global sales and facing fresh headwinds from US President Donald Trump’s automobile tariffs, which are expected to cut the company’s operating profit this fiscal year by as much as 450 billion yen, or about 3.12 billion dollars.