Nissan to Cut Rogue & Frontier Production to Reduce Inventory
Nissan Motor Co., Ltd. NSANY has informed its dealers that it is set to reduce production of the Rogue and Frontier by up to 40,000 units in September and October. This decision aims to address inventory and oversupply issues, as dealers face challenges in boosting sales and profits, even though the Rogue remains Nissan's top-selling model.
Rogue sales have declined 4.5% in the first half of the year compared with the same period last year. Although Frontier sales are up 17.1%, both models still have supply levels higher than the industry average.
Per Automotive News, Nissan notified suppliers last month about the output cuts at its Smyrna, TN and Canton, MS, plants. Production of the Rogue has been scaled back from five days a week to four, a change set to continue until the end of October. Frontier production has also been reduced by a day and will last until March 31, 2025.
Nissan advised dealers in May to sell vehicles at a loss to reduce growing inventories, which reached a near 100-day supply. While this strategy has helped lower inventory levels closer to industry standards, it hasn't fully solved the problem, and dealer profitability has taken a hit.
Along the same lines, Honda Motor Co., Ltd. HMC temporarily suspended production at its three factories in Wuhan, operated with Dongfeng Motor Corp, due to high inventories. The halt began on Aug. 26, 2024, and lasted two weeks. In August, Honda's sales in China fell 44.3% year over year amid rising competition from EV makers. The automaker will also halt production later this year at a Dongfeng Honda factory and one plant of GAC Honda Automobile Co.
Zacks Rank & Key Picks
NSANY currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the auto space are Dorman Products, Inc. DORM and Blue Bird Corporation BLBD, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for DORM’s 2024 sales and earnings suggests year-over-year growth of 3.71% and 35.46%, respectively. EPS estimates for 2024 and 2025 have improved 51 cents and 37 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for BLBD’s 2024 sales and earnings suggests year-over-year growth of 17.58% and 215.89%, respectively. EPS estimates for 2024 and 2025 have improved 65 cents and 80 cents, respectively, in the past 60 days.
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Honda Motor Co., Ltd. (HMC) : Free Stock Analysis Report
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