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Nissan to cut NA output by 20 percent

by Drew Johnson

The move is intended to help profitability.

In an effort to improve profitability, Nissan is reportedly cutting production at its North American plants by up to 20 percent.

According to Japan's Nikkei, Nissan has already begun to slow output at two plants in the United States and another three in Mexico. The measure is part of Nissan's latest corporate plan to focus on profitability rather than total volume.

In 2010 Nissan set out to capture 10 percent of total sales volume in the United States. It accomplished that goal, but did so at the expense of company profitability. Nissan used incentives to keep sales rolling, resulting in a 31 percent drop in operating profit for the fiscal year that just ended. Sales have also fallen off, with the company reporting a 28 percent dip in sales for the month of April.

According to Automotive News, Nissan warned dealers that it would be curtailing production beginning on April 1. Nissan is hoping to sell down its inventory glut, which should ultimately help the company's bottom line. However, it could take quite a while to right the ship.

In addition to focusing on improving profits in North America, Nissan's new strategy will also see an expansion in the Chinese market.