Nissan Motor Co. announced Wednesday that it will reduce annual production capacity by 100,000 units by closing vehicle assembly lines at an affiliate in Aichi Prefecture.

Nissan will stop producing vehicles at Aichi Machine Industry Co., 33.1 percent of which Nissan owns, and transfer most of its manual transmission development and production units to the Nagoya-based company by the end of March 2001.

"We're reviewing the vehicle production system of the whole Nissan group. We announced part of it today," Nissan executive vice president Kosei Minami said at a Tokyo press conference.

The ailing automaker has said it plans to cut 15 percent of its annual production capacity of 2 million units "as soon as possible."

At its peak, Nissan once had a capacity of 3 million units per year, Minami said. The Nissan executive said that this time, he does not expect to see major layoffs at either Aichi Machine or Nissan Motor, because most of the vehicle assembly workers at AMI will be transferred to the firm's manual transmission units or Nissan's plant in Tochigi Prefecture.

Consolidation of vehicle assembly operations alone will boost Nissan's group income by 6 billion yen per year in total, Minami claimed.

AMI produces two vans — the Serena and the Largo — and such auto components as engines and manual transmissions.

Minami said sales at the affiliate will significantly drop as a result of the restructuring, but that the move will strengthen AMI's financial status because it has suffered from fluctuating production of the vans.