NISSAN Motor Co and Hyundai joined other Asian car makers in additional -production cuts as sales in the United States were predicted to fall to the lowest rate in 25 years.
Nissan, Japan's third-largest auto maker, will cut production at two US factories by 65,000 vehicles between November and March, Ikue Matsuura, a spokeswoman for Nissan, told Bloomberg News yesterday. The car maker will also stop production for three days at plants in Tennessee and Mississippi. Hyundai, South Korea's biggest car maker, will stop production at its Alabama plant for 11 days this year.
US sales for Asia-based car makers plunged a combined 30 percent last month as the credit squeeze made it more difficult to finance new vehicle purchases. The cuts by the two car makers follow similar adjustments by Toyota Motor Corp and Honda Motor Co. Deutsche Bank AG forecasts October's annualized sales rate will be the lowest since 1983.
"It's a financial well-being issue," said Jim Hossack, an auto industry analyst at Auto-Pacific Inc in California. "The entire nation has woken up and found their homes aren't worth as much, that their stocks and 401(k)s aren't worth as much."
US Federal Reserve Chairman Ben S. Bernanke said on Monday that the economy would probably slow for "several quarters" as spending and business investment weakened. Nissan shares gained 2.3 percent to reach 539 yen by 1:55pm on the Tokyo Stock Exchange. The shares have fallen 56 percent so far this year. Hyundai shares fell 5 percent, contributing to this year's 20 percent decline.
Nissan's Smyrna, Tennessee, plant will halt output of sedan, coupe and hybrid versions of the Altima as well as the Maxima sport sedan on October 17, 24 and 31, said Steve Parrett, a spokesman for Nissan's North American manufacturing unit. Altima production is being canceled at the Canton, Mississippi, plant on the same days, he added.
"We're managing our production level with flexibility and based on customer demand," Parrett said. He declined to say whether there will be more reductions in November and December.
Nissan's US sales dropped 37 percent in September and Hyundai's declined 25 percent. The overall market fell 27 percent.
Nissan will also cut its production in the UK and Spain, Yuichi Nakagawa, a Nissan spokesman, said. The company will halt production of the Micra and Note compact cars for 14 days between October and November, and shorten working hours, he said.