SEOUL, May 29 (UPI) -- Japanese automaker Nissan Motor announced Thursday that it plans to pull out from South Korea at the end of 2020, 16 years after it entered the country in 2004.
Nissan's Korean unit said its head office in Yokohama made the decision as a part of its restructuring strategy after suffering from the biggest deficit in two decades.
The company netted a $6.2 billion loss in its latest fiscal year, which finished in March. As a result, it plans to slim down by slashing production capacity and shutting down some factories.
In particular, its Korean operation has languished over the past few years. The sales of the Nissan and premium Infiniti brands amounted to around 9,000 in 2017 in the country but slipped to some 5,000 in 2019.
During the first four months of this year, sales more than halved from a year ago.
Nissan Korea said its headquarters decided to withdraw from Korea on the belief that the automaker will not be able to secure a sustainable business model here.
Nissan was hit hard by Korean consumers' boycotts of Japanese products, which started last July when Tokyo disclosed its intention to impose curbs on exports of high-tech materials to Seoul.
They were crucial substances of semiconductors and flat-panel displays, the two major export items of South Korean companies.
The measure spawned nationwide anger, which prompted Korean people to reduce purchases of made-in-Japan items. Nissan's sales also dipped from last summer.
Against this backdrop, rumors circulated about Nissan's imminent exit last year. Back then, however, the company denied them, stressing its long-term commitment to the Korean market.
Although its sales operation is set to stop at the end of December, customer services will continue through 2028, Nissan Korea said.