Nissan mulls reducing domestic manufacturing levels

Japanese automakers' output was significantly affected by the natural disasters that struck the island nation in March. One of the country's biggest carmakers is mulling whether to reduce domestic output as it struggles to increase manufacturing capacity.

The Wall Street Journal reports Nissan Motor Co. officials are debating whether to shift manufacturing to other countries as the strengthening yen continues to eat into its profit margins. Nissan said it could augment production at its overseas facilities if the yen continues to rise in value against the dollar.

In fact, Nissan affirmed it could reduce domestic output to fewer than 1 million vehicles per year if the yen rises handily against the dollar. Increased business costs have eroded the company's profit margin over the past year, and many economists expect the Japanese currency will rise throughout the end of this year.

"We would like to keep to one million units [in Japan], but if the yen becomes even stronger it may be quite difficult to maintain," Nissan chief operating officer Toshiyuki Shiga said.

For every one yen the Japanese currency gains against the greenback, Nissan loses more than $250 million in annual operating profit, Shiga asserted.