Nissan’s Relocation Seen Not to Affect Production or Suppliers

Nissan announced it will consolidate its vehicle manufacturing operations in Mexico by transferring production from its CIVAC plant in Jiutepec, Morelos, to its Aguascalientes complex by the end of fiscal year 2025. Although approximately 2,400 workers at the CIVAC facility face potential layoffs, industry leaders maintain that Nissan’s overall production volume in Mexico will remain stable. 

“Nissan will maintain the same production level it had with the three plants, only now concentrated in Aguascalientes, so it should not represent any impact,” said Odracir Barquera, Director General, Mexican Automotive Industry Association (AMIA).

Nissan’s CIVAC plant had operated for nearly 60 years and played a central role in the economic development of Jiutepec. The facility’s closure will significantly affect the local economy, though not the broader automotive manufacturing sector. According to the National Auto Parts Industry (INA), Morelos contributes just 1.5% of Mexico’s total auto parts production.

“Most suppliers that served CIVAC also supply other plants across the country and export mainly to the US market. Morelos represents only a small fraction of the national parts output. Affected suppliers are few, and many can shift production to other facilities,” says Gabriel Padilla, Director General, INA. 

Alberto Bustamante, Director of the National Agency for Automotive Suppliers (ANAPSA), echoed that the transition will not disrupt the supply chain. “The few suppliers that delivered to CIVAC are not relocating,” he said. The Bajio region—including Aguascalientes, San Luis Potosí and Guanajuato—already hosts a mature supplier ecosystem capable of supporting the increased load.

Under the Re:Nissan plan, the company aims to reduce its global vehicle production capacity—excluding China—from 3.5 million to 2.5 million units and consolidate manufacturing sites from 17 to 10, while maintaining a plant utilization rate near 100%.

In light of the closure, Nissan stated in a letter to employees that it “will fully comply with labor regulations” and support affected workers throughout the transition. Labor attorney Óscar de la Vega of D&M Abogados explained to EL Economista that this case presents a challenge for Mexico’s new labor justice system implemented in 2019.

“When the termination of labor relations results from a cause of force majeure not attributable to the employer, a special collective procedure must be followed,” said De la Vega. In the case of Nissan, the closure may be considered a result of “notorious unprofitability,” triggering a different legal route for mass terminations. “This will test the technical knowledge and impartiality of the new labor judges,” he added.

According to De la Vega, compensation in this context would be limited to three months of salary and 12 days per year of service, without the additional 20 days per year usually applied in layoffs due to other causes.