Nissan’s plant in Barcelona will convert into a battery factory In February 2021, several media including TimesLIVE reported that Spain is considering that the country converts Nissan’s car plant in […]
Nissan’s plant in Barcelona will convert into a battery factory
In February 2021, several media including TimesLIVE reported that Spain is considering that the country converts Nissan’s car plant in Barcelona into a battery production facility for electric vehicles. This possible action can be one option to preserve thousands of jobs.
In fact, the EU seeks for new battery production in Europe because the region tries to reduce imports. In addition to this, automotive manufacturers should achieve carbon neutrality for a long-term as well as meet tough European emissions regulations for a short-term.
Nissan has three plants in the Barcelona area and employs around 3,000 people directly and 20,000 indirectly. The plants would have been shut down originally by the end of 2020, but the plan was postponed to make authorities to find another company interested in the facilities. This is because its main plant stands on publicly-owned land.
The regional government of Catalonia supports the Battery Hub project to build a battery production and recycling plant in the region. Many companies had shown interest in Nissan’s plants and authorities will take into account how many jobs can be preserved there. There is the other possible options including an electric vehicle plant or another electric mobility-related project.
Who is Nissan?
Nissan is a multinational automotive manufacturer that sells a full line of vehicles under the Nissan, INFINITI and Datsun brands. Its head office is located in Yokohama, Japan. As of March 31st, 2020, the Japanese automotive giant has about 160 thousands employees across the globe and earned 9,879 billion JPY (consolidate）for net sales in FY2019.
When it comes to global retail sales volume, Nissan sold 4,930 thousands units in FY2019. China and the North America are the two important regions for the company. In fact, it sold 1,547 thousands units in China and 1,620 thousands units in North America, respectively. However, both consolidated sales and global retail sales volumes were decreasing from FY2017 to FY2019, and the decrease of the sales volumes in North America stood out.
What can we learn from the report?
In this article, we mainly discuss three points: From volume to value, Electrification and Battery.
From Volume to Value
First, Nissan’s decision to close its plants in Barcelona is strongly related to the strategy “from volume to value”. Of course it does not mean that volume is not important. In fact, Toyota Corporation, which is the largest automotive manufacturer in terms of the number of production, is planning to produce a record number of vehicles in 2021. However, as the case of Nissan and its alliance French company, Renault, they do not seek for volume but enhance their value. As we can see the other article about Renalution, the French automotive giant set its strategy to turn the situation around.
Second, electrification is inevitable. Climate change is one of the biggest problems around us. More and more countries and companies declare their intention to achieve carbon neutrality in the next 10 to 30 years. Of course, it takes long time, but companies will lose their trust or cannot finance in the near future if they do not take any actions. In this sense, the demand of electric vehicles is skyrocketing, so the idea to convert Nissan’s Barcelona plants into electric vehicle facilities does make sense.
Third, strategic products should be produced domestically. In this case, batteries are critical components of electric vehicles, but large proportion of their production is Asian region, especially in China. Therefore, the EU takes some initiatives to encourage European countries and companies to manufacture batteries by themselves. If Nissan’s plants become battery factories, it does make sense as well.