Nissan’s new Ariya electric vehicle continues to be hampered by production issues, hindering what had been hoped would be the beginning of a comeback for the Japanese auto giant.
Unveiled in 2020 to strong reviews, the crossover was Nissan’s first all-new global car in five years and signalled an intent to turn the corner after the ousting of former head Carlos Ghosn.
But production is running at least a third below targets, keeping the Ariya from shipping to new customers, sources have revealed.
The shortfall represents a lost opportunity to capitalise on the Ariya’s buzz and test demand for the first of 19 new EVs Nissan plans to roll out by 2030. It also hinders the automaker’s plans for growth in the electric car market it helped pioneer before ceding dominance to Tesla.
Ariya production has been reportedly slowed by problems with the highly automated “intelligent factory” manufacturing system it built for the model at its plant in Tochigi, north of Tokyo.
Nissan designed a system that would allow it to produce cars with different powertrains – batteries, hybrids and internal combustion engines – on the same line.
Implementation has proved “an extremely, extremely high challenge” and the advanced paint line has become a persistent headache, it’s claimed.
Nissan also faces shortages of plating for an electronic component for the Ariya after a fire at China-based supplier Wuxi Welnew Micro-Electronic in January. The supplier told Reuters it had shifted output to a second plant and was “working to recover production.”
In a statement to Reuters, Nissan said Ariya production had faced challenges including supply of semiconductors, disruptions in components shipments and the factory’s paint line. “Nissan is making a full and diligent effort to fully regain production capacity at the plant,” the company said.
S&P Global Ratings this week cut Nissan’s debt rating to junk status, saying margins and sales volumes were unlikely to improve as quickly as previously expected.
Nissan, Renault Tie-up Overhaul
The production challenges come as Nissan and France’s Renault SA in January agreed to overhaul their two-decade-old alliance on more equal footing. Nissan also agreed to invest in Renault’s new EV business.
The Japanese automaker rode a wave of early interest in EVs with the Leaf hatchback in 2010. But by 2020 that car was overtaken by Tesla’s Model 3 in terms of lifetime sales. EVs accounted for just 4.5% of Nissan’s global sales of 3.2 million vehicles in 2022.
Nissan has targeted production of 400 Ariyas a day, equivalent to almost 9,000 vehicles a month and more than 100,000 a year.
Output over the next two months is expected to fall short of that, according to production planning notes from last month reviewed by Reuters. Output in March was forecast at under 6,900 vehicles and at around 5,200 in April and 5,400 in May, according to the planning notes. That has since been lowered, one of the people said.
Japan Dealers Halt Ariya Orders
US dealers stopped taking Ariya customer reservations last year, while Japanese dealers stopped taking orders in August. The Ariya was supposed to hit showrooms in 2021, but that was pushed back to 2022 because of a global chip shortage.
The car has won praise for a bold exterior and a sleek interior with lights inspired by Japanese lanterns.
The Ariya line was built with an initial investment of $243 million as part of the “intelligent factory” initiative that Nissan says represents a completely new production system with robotics and a zero-emission pledge.
The new paint line was designed to paint an entire car, including body and bumpers, together, to boost efficiency and be more environmentally friendly.
Nissan has also invested in a new assembly technique that allows different powertrains to be lifted from underneath before robotic installation, saving time.
- Reuters with additional editing by Sean O’Meara