Nissan Motor Co. is considering pulling out of South Korea, the Financial Times reported on Friday, as political and trade tensions between Japan and South Korea have caused sales of Japanese products in the neighboring country to plummet.
Nissan and other Japanese firms have been a casualty of consumer boycotts of products ranging from cars to beer in South Korea, triggered by a sudden tightening of export controls by Tokyo earlier this year, as trust between the two countries has eroded over wartime issues.
Citing unnamed sources, the FT said that besides stopping sales in South Korea, Nissan is also mulling its involvement in an assembly plant in Busan owned by Renault Samsung Motors Co., a joint venture with Nissan’s French automaking partner Renault SA. The plant makes cars mainly for export markets.
Nissan spokespeople in South Korea and Japan declined to comment on the report.
Japan’s second-biggest automaker has been trying to strengthen governance, slash costs and boost flagging profitability amid persistent allegations of financial misconduct stemming from former Chairman Carlos Ghosn’s 20-year reign.
Nissan’s market share in South Korea has long lagged its domestic rivals. Along with its luxury Infiniti brand, the automaker sold just 3,581 cars in the country in the January-August period this year, down 27 percent from a year ago and trailing far behind Toyota Motor Corp.
Japanese automakers are small players in the South Korean auto market, which is dominated by Hyundai Motor Co. and German imports including the Mercedes Benz and BMW brands.