Nissan Plans to Increase Share of U.S. Production to 80%

As part of its reshoring policy, the United States continues to raise tariffs and pursue protectionist measures targeting both competing countries and countries where American companies have established operations. At the same time, the U.S. offers incentives to companies that bring their businesses back to the country or relocate their operations there. Between 2022 and 2025 alone, dozens of major companies relocated or established manufacturing facilities in the United States, including TSMC, Samsung, Micron, Hyundai, LG, Toyota, Honda, BMW, and others. Among these companies is Japanese automaker Nissan Motor, which plans to expand production at its existing U.S. facilities.

In addition to the aforementioned factors of rising tariffs and government incentives, exchange rate fluctuations and logistical volatility have also contributed to this decision. Amid geopolitical uncertainty, shipping vehicles by sea is becoming more expensive and less predictable, prompting manufacturers to reduce risks by moving production closer to their customers. Another factor is the rise in gasoline prices in the United States, which is driving demand for electric and hybrid vehicles. Taking these factors into account, Nissan Motor has decided to increase the share of vehicles assembled at its U.S. plants from the current 65% to 80% by 2030. Moreover, the company's first electric vehicle manufacturing plant opened in 2012, providing a foundation for further production expansion. According to Kyodo News, the new Rogue Hybrid crossover is expected to go on sale as early as November this year, while hybrid versions of larger SUVs and pickup trucks are also planned for the future.

However, such a shift in production involves considerable costs and risks, meaning the company must carefully weigh the advantages and disadvantages of this decision. The potential benefits include reduced tariff burdens, savings on logistics and customs duties, access to government support and subsidies, and increased demand, which would consequently boost the company's profits. The challenges Nissan Motor will face include substantial capital investments required to expand production, dependence on local supply chains, rising labor costs in the United States, and intensifying competition in the U.S. market from both domestic and foreign manufacturers. If Nissan Motor succeeds in increasing its profits, this could serve as an additional incentive for other Asian automotive brands to relocate or expand their production operations in the United States.

Thus, it is worth noting that Nissan Motor has chosen a strategy of adapting to new economic realities — a protectionist market in which global value chains are increasingly giving way to regional ones.

Author: Doctor of Economics, Professor at the Department of World Economy and International Finance, Financial University under the Government of the Russian Federation, Elena Borisovna Starodubtseva.