Nissan to temporarily cut output at 2 Japan plants

TOKYO, Mar 16 (Reuters) Nissan Motor Co. said on Friday it would cut back production at two car assembly plants in Japan for three months starting in April, reflecting a sharp slide in its domestic sales.

Japan's market for full-sized and compact cars has been on a steady decline as demand shifts to fuel-efficient 660cc minivehicles, but Nissan has suffered bigger drops than its rivals due to a slim line-up of new models.

To adjust inventory levels, Nissan said production would move to a single shift from two shifts between April and June at the Oppama and Tochigi plants, which assemble about a dozen models ranging from the March subcompact to the Infiniti Q45 sport utility vehicle.

Nissan, Japan's third-biggest automaker and held 44 percent by Renault SA , declined to say how many vehicles would be lost. The two plants have a combined annual output capacity of about 740,000 units.

But a spokeswoman said production in Japan for the export market as well as output overseas would rise in the new business year starting next month, resulting in a net increase in global production for 2007/08.

Nissan has also idled one of three lines at another factory in Kyushu, southern Japan, indefinitely since last September due to slow sales of the Teana high-end sedan.

For the first two months of this year, Nissan's sales of non-mini vehicles in Japan fell 16 percent to 100,623 units, while the overall market shrank by 9.4 percent.

Its minivehicle sales surged 24 percent in the same period, but those are supplied by Suzuki Motor Corp. and Mitsubishi Motors Corp. .

Aiming to repair its tattered domestic operations, Nissan on Friday announced a management reshuffle that would allow Chief Operating Officer Toshiyuki Shiga to focus on Japan and remove what Nissan refers to as the general overseas markets from his duties.

Colin Dodge, a senior vice president currently in charge of manufacturing and purchasing, will join the nine-member management committee to take Shiga's place heading the collective market which excludes Japan, North America and Europe.

In another major change, Chief Executive Officer Carlos Ghosn will be relieved of his responsibility as the top official in charge of the Americas to focus on his dual task of heading Nissan and Renault.

Hiroto Saikawa, now an executive vice president assigned to the European market, will take over the region from Ghosn. The latest management modifications, to take effect on April 1, will add two members to the seven-man executive committee.

Ghosn is under pressure to jump-start disappointing profits and sales at both Renault and Nissan.

Last month, the Frenchman promised to draw up additional measures to help Nissan meet its targets under a three-year plan after the company forecast a first full-year earnings drop under his watch. That announcement is due next month.

''The priority for our new management team is to act decisively on the multiple challenges facing Nissan and to boost our overall performance in 2007,'' Ghosn was quoted as saying in a statement.

By the midday break, shares in Nissan were down 0.8 percent at 1,286 yen as auto stocks fell on the stronger yen. The transport sector subindex <.iteqp.t> was down 1.2 percent.

REUTERS CS KP1143