After announcing the end of negotiations for a merger with Honda, Nissan is now trying to follow a new strategy to recover from consecutive quarterly net losses, in a plan that promises to cut about €2.5 billion in costs globally.
In this regard, “Reuters” reported that Japan’s third-largest automaker by volume has initiated a voluntary redundancy process for workers and is reducing shifts at three factories in the U.S.
The urgency to find an alternative to the failed merger with Honda became even more pressing this Thursday, after Nissan revised downwards, for the second time, its expected operating profit for 2024, which decreased from $970 million (about €932 million) to $780 million (about €750 million), due to a cooling of sales.
According to the quarterly financial report released this Thursday by Nissan, between April and December, operating profit fell by 86.6% to €399 million, and sales revenues decreased by 0.3% to €57 billion. Nissan attributed these figures to “decreased sales, increased sales incentives, and inflation”.
The automaker sold 2,397,000 vehicles in the nine months up to December, a decrease of 1.8% year-on-year, reporting declines in all markets except North America.
The drop in sales was particularly significant in China, at 9.1%, “where the market continues to be a challenge”, said the Japanese company’s CFO, Jeremie Papin, at a press conference. In Europe and Japan, the decline was 2.6%, while it was 0.3% in other markets where the manufacturer operates.
Thus, the plan involves reducing fixed costs, and in this regard, about 2,500 indirect jobs will disappear, with 1,000 being created in shared service centers, and the production lines in Smyrna and Canton in the U.S., as well as in Thailand, will reduce the number of employees by 6,500 over the next two years.
Additionally, Nissan plans to cut costs by reducing the development time for new models, simplifying the product range, among other measures aimed at ensuring the brand’s survival.
It is worth noting that in November 2024, Nissan announced a plan to cut 9,000 jobs worldwide and reduce the maximum capacity of its 25 factories globally, due to the decline in sales in China and North America.
Following the announcement this Thursday of the end of talks between Honda and Nissan regarding a merger, the Yokohama brand, which remains part of the Alliance with Renault and Mitsubishi, will need to seek a new partnership, which may involve Foxconn, a tech company that has already shown interest in cooperating with Nissan.
