Nissan is stepping up its global restructuring after reporting a tough financial quarter. The Japanese automaker announced a net loss of USD 535 million (¥79.1 billion) for April-June 2025, hit by weak sales and higher costs linked to U.S. tariffs.

As part of its turnaround plan, Nissan revealed it will close its Civac plant in Mexico by March 2026. The factory, which has been a key site for building compact cars, has lost its edge due to shifting consumer demand and tariff-related challenges. Production will be shifted to plants in Asia and North America, where Nissan hopes to operate more efficiently.

This move is not isolated. Nissan has already been shutting or scaling down factories worldwide as it works to streamline operations and cut excess capacity. The company wants to free up resources to invest in future growth areas such as electric vehicles and advanced driver-assistance technologies.

The closure of the Mexico plant also reflects how global trade dynamics are reshaping automakers’ strategies. Mexico has long been seen as a cost-effective hub for producing vehicles aimed at the U.S. market, but tariffs have made it harder to maintain that advantage. By relocating production, Nissan is betting it can reduce exposure to trade barriers and position itself better for the EV transition.

Although these decisions are painful in the short term, impacting workers and reducing output, they are part of Nissan’s effort to return to profitability. Analysts say traditional carmakers like Nissan are under mounting pressure. Sales of conventional cars are slowing, regulatory requirements are getting stricter, and the cost of electrification is rising.