Nissan Motor to Reduce Production

Automaker blames slowing U.S. demand for plans to cut 65,000 units.

Nissan Motor Co. today announced plans to cut Japanese production of large and luxury cars meant for export to the United States as demand slows in the world's largest economy. The automaker will reduce production of its Infinity brand luxury cars and its Murano and Rogue sports utility vehicles by a total of 65,000 units between November and March.

The cuts would reduce Nissan's total output in Japan by 4.7% from the 1.39 million vehicles it initially planned to produce in the year through March.

"The decline is due to dwindling sales in the United States, especially of large-sized and luxury cars," a Nissan spokeswoman said.

Nissan is also considering cutting jobs for some of its 2,000 temporary workers at the plants, she added. Japanese automakers have enjoyed brisk profits in the U.S. auto market in recent years, helped by firm demand for fuel-efficient cars and a weak yen. But their earnings prospects are being reduced by a slowdown in the United States, which has been hit by financial crisis, a weaker dollar and high raw material costs.

Earlier this month, Japan's top automaker Toyota Motor Corp. reported a 29.5% drop in September sales in the United States. Japan's number two automaker Honda Motor Co. is also planning to reduce production in the United States of large-sized cars by 22,000 vehicles between November and March, the Asahi Shimbun newspaper said.

Copyright Agence France-Presse, 2008

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