Nissan chief warns on threat posed by Chinese rivals’ rapid pace of production

Nissan’s chief executive has warned that the rapid pace of production of Chinese carmakers is piling pressure on international manufacturers as they struggle to compete for market share.

Makoto Uchida issued the warning as Japanese brands in particular lose consumers to highly competitive Chinese rivals.

He told the Financial Times’s Future of the Car summit on Wednesday that “agile” local carmakers in China, the world’s largest auto market, were pushing rivals to speed up production.

“We should not be just relaxed and sitting down. The lead time is very agile,” Uchida said, adding that Chinese manufacturers were showing “massive strength”.

The time it took Chinese manufacturers to bring a car to market was “much faster than we expected before”, he said. “We need to align.”

Chinese carmakers are making big inroads at home and overseas with competitively priced electric vehicles, leaving behind some international manufacturers.

Japanese brands, including the world’s biggest carmaker Toyota, are some of those suffering the most as a result.

Toyota said it would accelerate its electric vehicle line-up in China, after its 2022 sales in the country fell for the first time in a decade.

Nissan, which reports earnings for its full year on Thursday, had projected in February that sales of Chinese cars would fall 24 per cent volume-wise to just over 1mn in the 12 months to the end of March.

That would push Chinese sales by unit — previously its biggest market — below those in North America. The group has a passenger car joint venture in China with Dongfeng Motor.

“How we can make something for China in China . . . will be the key,” Uchida told the FT summit.

Chinese groups such as Nio and BYD are also looking to take on European brands on their home turf in another challenge for companies struggling to bring down the cost of production to make EVs accessible to consumers.

“The biggest danger is the Chinese coming in . . . because they are coming in with quite competitive prices and with very good vehicles,” Linda Jackson, the chief executive of Stellantis’s Peugeot brand, told the FT summit.

Separately, Uchida said Nissan was still in discussions with the British government over how to salvage production at its plant in Sunderland, where it is seeking help to cope with high energy prices. It also has issues with the high cost of dealing with suppliers.

Sunderland was “a key plant”, Uchida said, but the group needed “competitiveness, especially in the supply chain”.

Both Uchida and Renault’s chief executive Luca de Meo said on Wednesday that talks to reset the capital structure of their long-troubled alliance were progressing well, despite the final signature of the new accord dragging on after it was outlined in February.

Uchida said there was no “specific hold-up” but added that the group needed to be sure the redesigned partnership, which might include an investment from Nissan in Renault’s electric vehicle unit Ampere, reflected “benefits for both sides” in its final version.

De Meo, who was also speaking at the FT car summit, said that after the listing of Ampere scheduled for later this year, the Renault group could look to float its Alpine sports car brand.

“Alpine could be a potential for an [initial public offering] but it will take time to show investors the power of the project,” he said.