TOKYO (Reuters) -Nissan Motor Co said on Tuesday it will stop producing vehicles at its Oppama plant in Japan by March 2028 and transfer operations to its factory in the southern prefecture of Fukuoka as part of a global restructuring plan to reduce capacity.

CEO Ivan Espinosa has announced sweeping plans aimed at turning around the embattled automaker - Japan’s third-largest - including slashing production capacity to 2.5 million vehicles from 3.5 million and manufacturing sites to 10 from 17.

Reuters reported last week that Nissan (OTC: NSANY ) was in talks to allow Taiwan’s Foxconn (SS: 601138 ) to use the Oppama factory, in the port city of Yokosuka, south of Tokyo, to produce EVs and avert a closure.

"Today, Nissan made a tough but necessary decision," Espinosa said in a statement. "It wasn’t easy - for me or for the company - but I believe it’s a vital step toward overcoming our current challenges and building a sustainable future."

Nissan said it would explore "a wide range of options" for the future use of the Oppama plant. Costs related to the transfer of production to Nissan Motor Kyushu will be disclosed along with first-quarter financial results, it said.

When the Oppama factory first opened in 1961, it was one of Japan’s first large-scale auto factories and a symbol of Nissan’s - and Japan’s - global ambitions. Long referred to as Nissan’s "mother factory", it employs 3,900 workers and has produced more than 17.8 million vehicles to date.

Other facilities and functions in the district such as the Nissan Research Center and a crash-test facility, will be unaffected, Nissan said.

Battered by declining sales in the United States and China, Nissan faces a mountain of debt repayment and mounting losses.