It’s no secret that Nissan has a long road to recovery ahead of it. However, it’s recent report for financial year 2024 (FY24) has shown just how high of a mountain the embattled Japanese automaker has to climb.
Revenue, operating profits and margins, ordinary profit, net income are all down, and that’s despite a relatively flat and stable sales result of 3.346-M units.
As a result, Nissan will be implementing extensive cost cutting measures to generate more cash flow for the company, as well as strengthening profits without relying too much on volume. The goal? To save ¥500 billion—a tall order for newly minted CEO, Ivan Espinosa.
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Just how deep of a hole is Nissan in right now? The company recorded a net loss of ¥670.9 billion, along with a net income loss of approximately ¥1.1 billion. To counter that, the company has announced that it will cut 20,000 jobs instead of the initial 9,000 planned in its previous announcement.
On top of that, seven assembly lines will be shuttered with production outlook reduced. Production will be consolidated to the remaining plants, be it for vehicle assembly, parts manufacturing, and other matters related to building automobiles. Espinosa admitted that Nissan has high (and rising) fixed overhead costs, but the company is determined, at the very least, to keep those stable.
The cost-saving measures also handed a heavy blow to the company’s electrification expansion efforts. In a bid to reduce expenses, it had also abandoned its plans to build an EV battery plant in southwestern Japan. Given that, it will save the automaker over ¥160 billion.
Nissan also said it will further utilize its partners within the Alliance that includes Renault and Mitsubishi. The company went as far as saying it will saddle up with Chinese partner Dongfeng to further boost its appeal in Asia, especially in China. For the European market, Nissan will lean more on Renault, while the US market will see greater collaboration with Mitsubishi. On the product side, Nissan announced that it will simplify its range and reduce platforms to just 10.
That said, it’s not as cut and dry as the measures mentioned above. External forces will also be at play. Chief among which are the tariffs in the US. At the moment, the US is the biggest market for Nissan and the only one that say positive results. In response, Nissan will prioritize US-built products, optimizing local capacity, reallocating tariff-exposed production, and working closely with suppliers to localize and adapt swiftly to market demands.
