Nissan sets harsh cost-cutting course

Reasoning behind the changes is mainly because the company’s consolidated net value decreased by 79.1 billion yen (approx. €481 million) to 5.98 trillion yen (approx. €36 billion), with consolidated operating profit decreasing by 303.8 billion yen (approx. €1.8 billion) to 32.9 billion yen (€200 million), representing an operating profit margin of 0.5%.

The Japanese manufacturer wants to improve its cost structure so that it is profitable from a sales volume of just 3.5 million vehicles worldwide. The stake in Mitsubishi will be reduced by around one-third.

As further tough cuts, Nissan has announced that it will reduce production capacity worldwide by 20 per cent and cut 9,000 jobs globally. In addition, “various measures to lower selling, general, and administrative expenses, decrease the cost of goods sold, rationalize its asset portfolio, and prioritize capital expenditures and investments in research and development.” With the staff reduction, Nissan aims to reduce fixed costs by 300 billion yen and variable costs by 100 billion yen compared to fiscal 2024. For his part, CEO Makoto Uchida will voluntarily waive 50 per cent of his monthly compensation from November 2024 – as will the other members of the Executive Board, the Group writes.

According to Nissan CEO Uchida, the cuts do not mean that the company will shrink: “Nissan will restructure its business to become leaner and more resilient, while also reorganizing management to respond quickly and flexibly to changes in the business environment. We aim to enhance the competitiveness of our products, which are fundamental to our success and set Nissan back on a path of growth. As a cohesive team, we are dedicated to working together to ensure the successful implementation of our plans.”

Nissan had announced its intention to change course in the spring, albeit less radically at the time. In its strategic plan ‘The Arc’, the manufacturer stated that it wanted to achieve cost parity between electric cars and combustion engines by 2030 and increase sales of electric vehicles by one million vehicles over the next three years. Nissan wrote that it intends to launch 34 new models with electric drive systems worldwide by 2030 – seven more than previously planned. In addition, electrified cars should make up 40 per cent of the global model mix by the 2026 financial year. By the end of the decade, it should even be 60 per cent – five per cent more than previously planned. Nissan does not specify in its annual report whether this will remain the case or whether these target figures are already outdated.

global.nissannews.com, global.nissannews.com (Mitsubishi)