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Construction of New Smart Factory Limits Production Capacity of Nissan's Electric SUV, Ariya, Making It Difficult for the Company to Achieve Its Annual Production Target

published: 2023-03-16 9:30

Nissan, once a leader in electric vehicles, had reportedly been looking to make a comeback with its all-electric SUV, the Ariya. However, recent reports indicate that the company may not be able to produce even one-third of its original target of 150,000 Ariya EVs per year due to production capacity issues. This comes as a significant blow to the automaker, which had been counting on the Ariya to lead its resurgence in the competitive EV market.

The Ariya made its debut in 2020, marking the first globally available car the company had released in five years and symbolizing the end of the era of the former CEO, Carlos Ghosn. Despite having high hopes for the Ariya, Nissan is now grappling with capacity shortage issues that have been caused, ironically, by its specially designed "high-tech" production line. Nissan introduced a "smart" production line at its plant in Tochigi Prefecture back in 2021 in an effort to produce pure electric, hybrid, and gasoline-powered cars simultaneously. However, insiders have reported significant problems with the high-tech line's production process, particularly with the Ariya's paint production line.

Nissan's current production target for the Ariya for 2023 is only one-third of its original goal, with the estimated production capacity for April and May revised down to about 5,200 units. In addition to production line issues, Nissan is also said to be struggling with chip shortages, a challenge that has been plaguing the wider auto industry.

Nissan dealers in the United States and Japan have already stopped accepting pre-orders for the Ariya, as the original pre-order production time was set for the end of 2022. According to reports, many customers who have ordered the car still do not know when they will receive it, causing significant headaches for Nissan's sales team.

Despite investing nearly $250 million in the smart factory with advanced robotics and equipment and aiming for zero emissions, the smart production line in Tochigi Prefecture has so far created more problems than intended. Nissan officials are said to be working around the clock to address the supply chain and production line issues, with hopes of restoring production capacity back to pre-order levels. The paint production line, originally designed to handle all paint jobs for the entire vehicle, including sheet metal and bumper processing, was intended to improve efficiency. However, it has now become the key obstacle to production.

The setbacks experienced by Nissan highlights the many challenges of investing in futuristic technology and the importance of ensuring the viability of production lines before launching new models. It remains to be seen how Nissan will overcome these challenges and regain its footing in the EV market.

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