Nissan is in discussions with Hon Hai (Foxconn) to collaborate on electric vehicle production at its Zuihan Factory in Yokosuka, Kanagawa Prefecture, Japan. Reports indicate that both parties are actively discussing plans for Hon Hai to manufacture its own brand of electric vehicles at this site, thereby revitalizing the electric vehicle production landscape in Japan.

The Zuihan Factory has been a crucial production line for Nissan since its opening in 1961, currently employing around 3,900 workers, thus providing stable jobs for the region. However, as the global automotive market shifts towards electric vehicles, alongside Nissan's efforts to restructure production capacity, the factory has faced closure or consolidation assessments in recent years.

In May, Nissan announced it would reduce its global vehicle factory count from 17 to 10, with the Zuihan Factory and its subsidiary, Shonan Factory, included in the adjustment list. The Zuihan Factory primarily produces small cars like the Note model, with a capacity of 240,000 vehicles per year, but according to MarkLines, its capacity utilization rate is projected to only be around 40% in 2024, far below the 80% breakeven point, adding significant operational burden on Nissan.

In an effort to optimize factory resources, Nissan is exploring the option of transferring some idle production lines to Hon Hai to manufacture its own brand of electric vehicles, aiming to improve overall line utilization and ease operational pressures. For Hon Hai, this collaboration represents an opportunity to expand its footprint in the Japanese market and establish electric vehicle manufacturing capabilities within Japan, further enhancing its 'electric vehicle + manufacturing services' strategy.

If successful, this partnership could breathe new life into the Zuihan Factory and help Nissan avoid massive layoffs and asset losses. Additionally, the area surrounding the Zuihan Factory hosts numerous parts suppliers within the Nissan network, and retaining these supply chains will help maintain the competitiveness of Japan's automotive industry and stabilize local economies and employment structures.

As global automakers accelerate their transition to electric vehicles and adjust production structures, Japan's automotive manufacturing bases will inevitably face more challenges. The discussions between Nissan and Hon Hai could serve as a model for cross-industry collaboration, which is not only key to corporate restructuring but also a litmus test for the advancement of Japan's manufacturing industry. However, both Nissan and Hon Hai are still in the detailed negotiation stage, and if the collaboration progresses smoothly, the Zuihan Factory is expected to see new electric vehicle models enter production in the coming years.