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Nissan has greatly reduced its planned production by a third at its primary Japanese plant this month, driven by weak demand in the U.S. market for its aging lineup. According to sources shared by Reuters, this decision will also lead to a reduction in the output of the Rogue crossover model, according to sources familiar with the matter.

As a result of this news, Nissan's share price dropped by 3% in trading on Friday.

In detail, the automaker reported an almost complete wipe-out in profit for the April to June period and subsequently cut its full-year outlook. This financial strain is largely due to the necessity of offering deep discounts in the U.S. to boost sales.

Demand for Hybrid Cars

Unlike its competitors Toyota and Honda, Nissan does not offer hybrid models in the U.S., and has not benefited from the recent increase in demand for hybrids as interest in electric vehicles has cooled. While it has struggled to compete without a hybrid lineup, the company has been securing partnerships overseas, according to VCPost.

Now, Nissan plans to produce just under 25,000 vehicles at its Kyushu plant in southwest Japan this month, including about 10,000 Rogue crossovers for export. This is half of the originally planned production for the popular model.

Workers at the Kyushu plant are now working reduced hours, clocking a little over seven hours a day instead of the usual eight, due to the scaled-back production schedule.

The company has faced challenges in selling the 2023 Rogue models in the U.S., particularly with the introduction of the 2024 model. Aggressive incentives were needed to clear out the 2023 inventory, while the promotion of the higher-margin 2024 models was less aggressive.

Although Nissan plans to launch 30 new models over the next three years, including 16 electrified vehicles, analysts remain cautious about the company's presence in its key markets.