Nissan has said it is cutting back on petrol car manufacturing in China after being caught out by a faster-than-expected shift to electric and hybrid vehicles in the world's biggest automotive market, with sales down 32% in the first nine months of the year.
The Japanese carmaker slashed its sales forecast for the year to between 2.97 million and 3 million vehicles, down from a previous prediction of 3.15 million, mainly because of struggles in China.
Ivan Espinosa, Nissan's chief executive, said: “China remains our biggest challenge,” he said. “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.”
Nissan's struggles in China come as the country's government has given heavy subsidies to its electric car industry, creating a huge number of Chinese EV competitors now chasing a shrinking market. The company said sales across China fell by 22% in the first half of the year, with pressure that "intensified from July through October" leaving sales down 32% in the first nine months, according to the company.
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 is cutting local production, exporting some products, and trying to ramp up its N series of models, which are electric or plug-in hybrids.
The divergence between markets highlights the challenge for global carmakers trying to continue selling profitable petrol and diesel cars while facing competition from newer Chinese rivals. Nissan reported increased sales in its home market and in North America, where the shift to electric cars has been much slower due to policy decisions, including Donald Trump's rollback of incentives for battery car makers.
Meanwhile, Nissan has also been among manufacturers slowing the EV shift in Europe. In the UK, the company lobbied to weaken the zero-emission vehicle mandate and to continue selling petrol cars after 2035. This came despite data showing demand for electric cars rising in the UK, particularly since the Iran war pushed up petrol and diesel prices. 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, northern England. Espinosa said he hoped products from Sunderland and Japan would be included in proposed "Made in Europe" rules from the EU. The rules as drafted would exclude all of Nissan's cars from subsidies and other incentives within the EU, adding pressure on the carmaker.
Analysis
Why This Matters
- The shift in China, the world's largest auto market, signals a structural change that could reshape global car manufacturing and trade flows, affecting jobs and investment decisions worldwide.
- Nissan's struggles highlight how legacy automakers face a choice between protecting profitable petrol car sales and investing aggressively in electric vehicles to avoid being overtaken by Chinese rivals.
- The company's lobbying against UK and EU EV mandates while boosting electric production in China illustrates growing tensions between corporate strategy and climate policy.
Background
Nissan, one of Japan's largest carmakers, has a major European factory in Sunderland, England. China has become the world's biggest automotive market and a leader in electric vehicle adoption, driven by government subsidies and the rise of domestic competitors such as BYD and NIO. The company's N series represents its push into new-energy vehicles including battery electric and plug-in hybrid models.
Key Perspectives
- Ivan Espinosa, Nissan CEO: Says the company was caught by a faster EV shift than expected in China, calling the market "very, very harsh" and the company's product lineup too petrol-focused.
- Ian Plummer, Autotrader: Notes that used EV sales in the UK rose 56% year on year in October, now accounting for one in 10 retail sales, contrasting with Nissan's lobbying against EV mandates.
What to Watch
- Whether Nissan's ramp-up of electric N-series models in China can reverse the sales decline in the coming quarters.
- The outcome of EU "Made in Europe" rules, which could exclude Nissan's Sunderland-built cars from subsidies.
- How other global carmakers respond to the China price war and whether more will follow Nissan in cutting petrol car production.
Checked
12 claims in this story checked against 1 source: 11 supported.
Show each claim
- Partly supportedNissan is cutting petrol-car production in China.World news | The Guardian: “The manufacturer slashed its sales forecasts for China and said it would cut back on petrol car manufacturing while increasing production of battery electric vehicles and plug-in hybrids”
- SupportedNissan was caught out by a faster-than-expected shift to electric and hybrid vehicles in China.World news | The Guardian: “Nissan has said it has been caught out by accelerating sales of electric and hybrid cars in China”
- SupportedNissan’s China sales fell 32% in the first nine months of the year.World news | The Guardian: “That pressure “intensified from July through October” and left the carmaker’s sales down 32% in the first nine months of the year, Nissan said.”
- SupportedNissan cut its annual sales forecast to 2.97 million–3 million vehicles from 3.15 million, mainly because of struggles in China.World news | The Guardian: “Nissan said it expected to sell between 2.97m and 3m cars this year, down from a previous forecast of 3.15m, mainly because of struggles in China.”
- SupportedNissan CEO Ivan Espinosa said China was the company’s biggest challenge and that the shift to new energy vehicles was faster than expected.World news | The Guardian: ““China remains our biggest challenge,” said Ivan Espinosa, Nissan’s chief executive. “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.””
- SupportedNissan said its China sales fell 22% in the first half of the year.World news | The Guardian: “Nissan said sales across China fell by 22% in the first half of the year.”
- SupportedChina’s government subsidies helped create a large field of EV competitors now chasing a shrinking market.World news | The Guardian: “China’s government gave weighty subsidies to its electric car industry, spotting an opportunity to overtake other countries such as Germany, Japan and the US”
- SupportedEspinosa said Nissan’s China lineup, led by the Sylphy family, was too closely associated with petrol engines, and the company was cutting local production, exporting some products and ramping up its N series.World news | The Guardian: “Espinosa said Nissan’s product lineup in China, led by the Sylphy family of saloon cars, was too heavily associated with petrol engines, so the company was cutting local production, exporting some products, while trying to ramp up its N series of models”
- SupportedNissan reported increased sales at home and in North America, where the shift to electric cars has been slower because of policy decisions including Donald Trump’s rollback of incentives.World news | The Guardian: “The company reported increased sales in its home market as well as in North America, regions in which the shift to electric cars has been much slower because of policy decisions, including Donald Trump’s tearing up of incentives for battery car makers.”
- SupportedNissan lobbied in the UK to weaken the zero-emission vehicle mandate and keep selling petrol cars after 2035.World news | The Guardian: “In the UK the carmaker has lobbied to weaken the zero-emission vehicle mandate, a target for increasing EV sales, and to continue to sell petrol cars after 2035.”
- SupportedAutotrader’s Ian Plummer said used-EV retail sales rose 56% year on year in October and made up one in 10 of Autotrader’s retail sales.World news | The Guardian: “Ian Plummer, the 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.””
- SupportedThe proposed EU “Made in Europe” rules as drafted would exclude all Nissan cars from EU subsidies and other incentives.World news | The Guardian: “The rules as drafted would exclude all of Nissan’s cars from subsidies and other incentives within the EU, adding to pressure on the carmaker.”
