LONDON -- Nissan will keep its UK plant even as it closes its factory in Spain as the automaker seeks to eliminate excess global capacity and become a smaller, more profitable company.
"In Western Europe we will maintain production of our core models in our UK plant in Sunderland and improve efficiency," Nissan CEO Makoto Uchida said while presenting the automaker's new business strategy on Thursday.
Uchida did not clarify his comment about "improving efficiency."
Previous reports have said the Sunderland factory will switch permanently to two daily shifts from three, but become a key hub for SUVs for Nissan and alliance partner Renault.
Nissan may build the Renault Kadjar and Captur SUVs at the Sunderland plant, the Financial Times reported on May 13. The Renault SUVs share the same underpinnings as the Nissan Qashqai and Juke, which are built in Sunderland.
The feasibility of the potential plan has been questioned by analyst firm LMC Automotive, which said the factory would not have the capacity to build Renault’s popular Captur utilizing just two shifts.
The Sunderland plant is Britain's largest auto factory. It built 346,535 cars last year, a drop of 22 percent from the year before.
Nissan UK said in an emailed statement: "Sunderland remains an important part of our plans for the European business. The new Juke was recently launched, and the plant is now preparing for the arrival of the new Qashqai."
Nissan will focus on "crossovers and SUVs" in Europe and work more closely with Renault, Uchida said in his presentation on Thursday.
Renault will be the alliance's lead brand for Europe under a new leader-follower strategy to give control of regions to the dominant brand.
"We will be perusing the leader-follower format to utilize the supply of some vehicles and technologies while focusing on crossovers and SUVs," Uchida said, without mentioning Renault directly.
Under Nissan's midterm plan, the automaker aims to cut 300 billion yen ($2.78 billion) in fixed costs and reduce global production capacity from 7.2 million to 5.4 million vehicles. Nissan will also close a plant in Indonesia, as well as a line making vans at a U.S. factory in Canton, Mississippi.
Nissan's operating profit has tumbled for four consecutive years as its pursuit of market share, particularly in the United States, led to overcapacity at its car plants, steep discounting and a cheapened brand.
Under the plan, Nissan will curb its ambitions for sales growth to target annual sales of about 5 million units, Reuters reported in April, a cut from a previous goal of 6 million cars outlined in July by then-CEO Hiroto Saikawa.
The automaker's Europe chairman, Gianluca De Ficchy, said on Thursday that Nissan intends to close its Barcelona main plant and two nearby facilities starting from December, but it will keep open two facilities in northern Spain.
Reuters contributed to this report