Nissan Motor said it plans to withdraw from the South Korea market by the end of the year due to falling sales, as part of a broader global restructuring plan which is expected to result in some 20,000 job losses worldwide.
The Japanese automaker reported a JPY671.2bn loss (US$6.2bn) in the last fiscal year ending in March 2020, with sales falling by 15% to JPY9,900bn.
Nissan said it will withdraw the Nissan and the luxury Infiniti brand from South Korea after combined sales of the two brands there fell by 55% to 972 units in the first four months of 2020. By contrast, overall sales of imported light passenger vehicles increased by over 10% to 77,614 units while domestic manufacturers reported a decline of just 3.4% to 477,540 units.
Local reports suggest Nissan decision to withdraw from the South Korea market also reflects lingering anti-Japan sentiment, which flared up last July following a dispute over trade, resulting in an unofficial boycott of Japanese goods in the country.
The company said it will continue to offer after-sales services for South Korean owners of Nissan and Infiniti models for the next eight years, until 2028.
A Nissan spokesperson told reporters “the company has reached a conclusion that it is hard to regain a sustainable growth structure in South Korea due to worsening business environments at home and abroad despite its efforts to keep operations here”.