TOKYO, June 25 - U.S. defence company Anduril Industries is in talks to acquire Nissan Motor’s Oppama vehicle assembly plant, located south of Tokyo, as part of efforts to manufacture military drones in Japan, three sources familiar with the matter told Reuters. The sources said no final decision had been made and that negotiations are ongoing.
If consummated, the transaction would convert one of Japan’s earliest large-scale postwar automobile factories into a facility dedicated to defence production. The Oppama plant, which first opened in 1961, has produced roughly 18 million vehicles and served as the production site for Nissan’s mass-market electric Leaf in 2010.
The discussions are unfolding against the backdrop of Prime Minister Sanae Takaichi’s government seeking to increase domestic arms manufacturing amid concerns that a crisis in the Taiwan Strait could draw Japan into sustained military demand and deplete existing weapons stockpiles. China, which regards Taiwan as within its territorial ambit, has not ruled out the use of force to achieve reunification, a strategic consideration driving Japan’s defence posture.
Sources said Nissan is also holding talks with other potential buyers for the Oppama site. Anduril has not been reported to have submitted a formal price for the property. Nissan declined to confirm whether it is negotiating with Anduril and said no decision has been made on the future ownership of the plant, which it plans to close in 2028 as part of a capacity reduction.
Anduril responded to inquiries by declining to comment on "market speculation," while stating that it is working with Japan and is "exploring opportunities to strengthen local production." The company will also need to secure orders from Japan’s military to underpin any acquisition, the sources said.
Converting Oppama for defence purposes could generate domestic debate. Critics wary of Japan’s postwar pacifist stance may view the repurposing of a civilian automotive factory for weapons manufacture as a significant shift. The potential sale also raises questions about foreign control, given that defence equipment built in Japan is typically produced under licence by domestic firms.
Japan’s government is preparing a new national security strategy to be unveiled this year that could accelerate investment in drones, munitions and other military equipment, and outline measures to broaden the country’s arms production base. The strategy’s content and the detailed steps to expand defence manufacturing remain to be confirmed.
Oppama sits on a coastal site of approximately 1.7 million square metres (18.3 million square feet), according to the sources, encompassing research, testing and port facilities. Anduril has not decided the full extent of the property it would require but has proposed retraining the plant’s workforce to manufacture defence hardware, one source said. Nissan previously announced plans to shutter the factory as part of a broader move to reduce production capacity by 1 million vehicles and to offer alternative employment to about 2,400 workers elsewhere in Japan.
The factory is located near the Yokosuka naval base, which serves as the headquarters for Japan’s Maritime Self-Defense Force and hosts the U.S. Navy’s only forward-deployed carrier strike group. Oppama also lies within the parliamentary district of Defence Minister Shinjiro Koizumi.
Koizumi met Anduril founder Palmer Luckey in December when Luckey visited Tokyo for the opening of Anduril’s Japanese unit. After that meeting, Koizumi posted on X that Japan had "much to learn from Anduril," and he has suggested ties with the company could support development of the domestic defence industry. In parliament in April, Koizumi cited Anduril’s collaboration with General Motors in the United States as an example of how drone developers and the auto sector might cooperate.
A spokesperson for Japan’s defence ministry declined to comment on any discussions involving Anduril and the Oppama plant.
Palmer Luckey, who co-founded Anduril in 2017 and initially gained recognition as the inventor of the Oculus Rift virtual reality headset, leads a company that says it can produce autonomous weapons systems faster and at lower cost than traditional defence contractors. This month, Anduril and General Atomics were awarded a contract by the U.S. Air Force to build the service’s first fleet of semi-autonomous combat aircraft, intended to operate in tandem with crewed fighters.
To demonstrate its ability to meet Japan’s domestic content requirements, Anduril last year produced a prototype drone named Kizuna - meaning "bond" in Japanese - using exclusively Japanese components. The company has also established units in Taiwan and South Korea to position itself in regional markets where governments are increasing defence spending to deter possible use of force by China over disputed territories.
While Anduril is one of several foreign and domestic firms eyeing Japan’s expanding drone market, sources previously told Reuters that demand in Asia is also attracting Ukrainian companies offering drones that have been battle-tested in the conflict with Russia.
Contextual note: The Oppama plant is slated to close in 2028 under Nissan’s capacity-reduction plans, but the timeline and details for any sale or repurposing remain unresolved. The sources who described the talks requested anonymity because they were not authorised to speak publicly.