2024 hasn’t been totally kind to Nissan. While there are a slew of new and redesigned models this year, operating profits are down by a staggering 85%. As a result, the Japanese automaker is taking drastic measures to turn the tide.
One of its move is selling a significant stake in its fellow Alliance member, Mitsubishi Motors. But what made it reach this point?
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Nissan does particularly well in its home market, Asia-Pacific, the Middle East, and Europe. It’s also Japan’s third-largest automaker, so problems like these seem unthinkable. The reason for the profit drop? It’s the North American and Chinese markets.
Sales in China dropped by a worrying 14.3%, while US sales went down by 3%. Nissan is currently struggling in China due to domestic competition and the agility of the homegrown brands. In the US, Nissan president Makoto Uchida said the core models are not selling as high as it was expecting. Crucially, those two markets represent half of Nissan’s sales worldwide.
With that, the company has sold 10.02% of its shares in Mitsubishi Motors. The latter has since purchased it back. Nissan says the sale ‘will support MMC’s management strategy as well as enhance Nissan's financial flexibility, paving the way for future growth opportunities.’ On top of that, Nissan will be slashing 9,000 jobs worldwide and wind down global production by one-fifth.
“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,” said CEO Makoto Uchida.
That said, he reassured stakeholders and the public that “These turnaround measures do not imply that the company is shrinking.”
