Japanese automaker Nissan Motor Co is planning to shut down its factories in Spain and Indonesia, as part of its new cost-cutting strategy after it reported its first loss in over 11 years. The sudden decision to shift its global production comes as the global car demand plummets to an all-time low due to the economic downturn caused by the coronavirus pandemic.

The company's chief executive, Makoto Uchida, announced on Thursday that Nissan will be moving its vehicle production operations from Indonesia to Thailand, while its European production will mostly be shifted to its plant in Sunderland. The decision is part of the company's wider plant to reduce its global production by 20 percent in light of the current market conditions.

For its fiscal year ended in March, Nissan reported a loss of around $6.2 billion, its first annual loss since 2009. Total car sales for its fiscal year dropped by more than 15 percent to around $91.6 billion. Nissan expects the worst numbers in the coming quarters as the global pandemic continues to disrupt its operations.

Nissan claims that its global vehicle production had dropped by more than 62 percent last month due to the ongoing factory shutdowns in some parts of the world. The continued lockdowns also resulted in a 42 percent drop in its global vehicle sales last month, as a result of the continued closure of its showrooms and the lack of demand for new vehicles.

Uchida mentioned during the company's latest earnings call that the future of the industry still remains unclear and it would be very hard to predict the company's performance in the coming quarters. However, the executive assured stakeholders that the company has secured the necessary financing and it is formulating additional strategies to ensure survival and return to profitability.  

The closure of its factory in Barcelona is expected to affect more than 3,000 jobs. The Spanish government claims that it did what it could to prevent Nissan from closing the factory. Foreign Minister Arancha Gonzalez Laya mentioned in an interview that they regret Nissan's decision despite the government's enormous efforts to keep their business in Spain going. The minister added that Spain has not yet given up and will continue to negotiate with Nissan to find a solution to protect its worker's jobs.

Spain currently has the second-largest car manufacturing industry right behind Germany. The sector accounts for about 10 percent of the country's gross domestic product (GDP). The decision to close its production site in Barcelona has resulted in several protests and strikes. The protest escalated to some workers burning tires outside of the factories. Protests against the company initially started after Nissan announced that it was cutting its workforce by 20 percent earlier in the month.