After Nissan reduced its production capacity by 20% and laid off 9,000 employees globally, "Bloomberg" recently pointed out that Chief Financial Officer Stephen Ma is about to resign. Under the leadership of current CEO Makoto Uchida, Nissan's stock performance has also reached a record high Worst in 5 years. What happened to Nissan, which has been surrounded by negative news such as production capacity reduction, massive layoffs, and high-level departures?
The well-known automobile brand Nissan announced its second-quarter financial report. The plummeting profit data shocked the world, with a net loss of more than 9.3 billion yen, a huge gap from the market's original estimate of a profit of more than 49 billion yen. Much lower than the 190.7 billion yen in the same period last year.
Net profit in the first half of the year from April to September was 19.2 billion yen, compared with 296.2 billion yen in the same period last year, a profit plunge of 93%. In response to the current financial pressure, Nissan announced large-scale layoffs. It is expected to lay off 9,000 employees worldwide, accounting for about 6% of the total number of employees, to reduce costs.
In addition to the major layoffs, Nissan CEO Makoto Uchida said that he would voluntarily cut his salary by 50% to show responsibility, and emphasized that the company will implement "emergency measures" to revive the business. Nissan's global productivity will be reduced by 20%, and fixed costs will be reduced by 300 billion yen and variable costs by 100 billion yen.
On November 18, Nissan once again reported a credit risk bomb. Nissan will face a record bond maturity in 2026, with an amount of up to US$5.6 billion. The maturing debt is In yen, U.S. dollar and euro terms, it reached the highest level of aggregate data compiled by Bloomberg since 1996. Kentaro Harada, chief credit analyst at Mitsubishi UFJ Securities Co., said that under the current circumstances, Nissan may become an "angel out of favor."
Revenue plummets, U.S. market declines, Nissan lowers 2025 sales forecast
Data released by Nissan shows that global sales in 2024 as of September are only 1.6 million vehicles, resulting in a decline in the company's revenue. Nissan's half-year sales fell slightly to 5.98 trillion yen from 6 trillion yen in the same period last year. In response, Nissan lowered its sales forecast for the full year to the end of March 2025 from 3.65 million units to 3.4 million units.
The main reason for the sales decline comes from the US market. Although Nissan has invested a lot in advertising and promotion, it has not achieved results. In the first half of 2024, the average revenue of Nissan's U.S. dealers dropped sharply by 70%, hitting the lowest level in the past 15 years, reflecting the lack of competitiveness of Nissan models in the U.S. market. In addition, because Nissan's electric vehicles are not eligible for the $7,500 tax credit provided by the U.S. government because the credit policy is only for vehicles produced in North America, Nissan's sales price is not competitive in the U.S. market.
Therefore, Nissan announced that it will shorten the new car development cycle to 30 months to accelerate product iteration, and focus on launching new energy models in China. It plans to further promote Plug-in Hybrid Electric Vehicle (PHEV) and e-POWER technology to respond to the market demand for new energy vehicles.
Nissan reorganizes internally and strengthens strategic cooperation opportunities externally
In response to the severe financial situation, Nissan is also undergoing internal restructuring. Uchida voluntarily took a 50% salary cut, while other senior executives agreed to follow suit. In addition, Uchida stated that he will prioritize the reform of the internal management structure, with the goal of establishing a flexible system that can quickly respond to market changes, especially in the fields of electric vehicles and new energy vehicles. To this end, Nissan has introduced a new "performance director", who will be replaced by Guillaume Cartier, the current head of Africa, the Middle East, India, Europe and Oceania, who will focus on improving sales and profits, and will Officially took office on December 1st.
In addition to internal reforms, Nissan said it will also strengthen its cooperative relationships with Renault, Mitsubishi and Honda and jointly explore strategic cooperation opportunities in the fields of technology and software services to share resources and enhance competitiveness. Uchida stressed that Nissan needs to unite and get back on the track of growth through internal and external cooperation. He pointed out: "Our goal is to build a more resilient company that can not only face market changes but also lead the innovation of future automotive technology."
Nissan's layoffs and large-scale structural adjustments this time reflect the company's determination to transform in the increasingly severe global auto market. Facing challenges from the U.S. and Chinese markets and the growing popularity of new energy vehicles, Nissan is trying to reinvigorate its market position through cost control, management restructuring and product innovation.
Source: Business Insider, AP, FOX business, Bloomberg
