Nissan has announced a major restructuring plan in response to mounting financial losses, including the elimination of 9,000 jobs from its global workforce and a 20% reduction in production capacity. The move comes after the Japanese automaker reported a loss of 9.3 billion yen (S$91 million) in the third quarter of 2024, compared to a significant profit in the same period a year earlier.
CEO Makoto Uchida confirmed that the company is now in “emergency mode,” with leadership pay cuts to follow, including a 50% reduction in his salary starting next month. These actions are part of a broader plan to cut fixed costs by 300 billion yen ($2.9 billion) and reduce holdings in Mitsubishi Motors, which will raise about 68.6 billion yen ($680 million) and will reduce Nissan’s influence in the automaker.
Nissan’s financial problems come amid declining sales in its two largest markets, China and the United States. The company’s vehicle sales in China fell 14.3% year over year through September 2024, following a 16.1% decline in 2023. In the United States, sales fell 15.5% this year. year, hampered by the lack of hybrid models.
Despite plans to release 30 new models by 2027 as part of Arc’s business plan, this restructuring will delay new launches. Nissan’s efforts to move toward electrification include partnerships with Mitsubishi and Honda, but the company lags behind competitors like Tesla.
“We have no choice but to partially revise the plan,” Uchida said, expressing regret over the challenges faced in the first year of the Arc plan. He promised that the company will become “leaner and more resilient” during the restructuring.
On the Toyko Stock Exchange, Nissan is trading 4.62% lower at ¥367. This is a 37% decline from last year.