Nissan Scales Back Output Cuts

Japanese automaker said Thursday that inventory levels have dropped low enough to ease domestic production cuts in March.

TOKYO (AP) -- Nissan Motor Co. said Thursday that inventory levels have dropped low enough to ease domestic production cuts in March.

Facing plunging sales, Nissan said earlier this month that shift elimination, work stoppages and shorter working hours will help reduce global production by 20 percent, or 787,000 vehicles, from its initial plan by the end of this fiscal year through March.

It also aimed to reduce inventory by 20 percent to 480,000 vehicles from 630,000 in March 2008.

The tighter inventory management is now "bearing fruit," said Nissan spokeswoman Pauline Kee.

Nissan, which expects to lose money this fiscal year, slashed production in Japan by about 60 percent in January and 70 percent in February. It plans to lighten those cuts to roughly 50 percent in March and will produce 60,000 to 70,000 units, according to Kyodo news agency.

Kee declined to provide specific production goals for the month or which factories would be affected. Local media estimates are not based on official information from the company, she said.

Tokyo-based Nissan, allied with Renault SA of France, is the nation's third-biggest automaker, manufacturing the Altima sedan and March compact.

Its domestic rivals are also expecting output to pick up slightly in the months ahead.

Toyota, which has been working hard to reduce excess inventory by stopping assembly lines on some days, is expected to achieve normal inventory levels by May.

Still, a complete recovery in production is unlikely to materialize anytime soon as economies around the world continue to deteriorate and consumers hold off on buying new cars.

Government data Wednesday showed that Japan posted a record trade deficit in January, with exports tumbling 46 percent from a year earlier. Exports to the U.S. fell 53 percent, with car shipments down 81 percent on a value basis.

Nissan expects a 265 billion yen ($2.7 billion) net loss for the fiscal year through March and announced 20,000 job cuts earlier this month.

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