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 carmaker reported a ¥9.3 billion (A$91 million) loss in the third quarter of 2024, compared to a significant profit in the same period the previous year.
CEO Makoto Uchida confirmed that the company is now in “emergency mode”, with leadership pay cuts to follow, including a 50% reduction in his own salary starting next month. These actions are part of a broader plan to cut fixed costs by ¥300 billion ($2.9 billion) and reduce stakes in Mitsubishi Motors, which will raise an estimated ¥68.6 billion ($680 million) and reduce Nissan’s influence in the automaker.
Nissan’s financial troubles come amid declining sales in its two largest markets, China and the US. The company’s vehicle sales in China dropped 14.3% year-on-year through September 2024, following a 16.1% decline in 2023. In the US, sales fell 15.5% this year, hindered by a lack of hybrid models.
Despite plans to release 30 new models by 2027 as part of its Arc business plan, this restructuring will delay new launches. Nissan’s efforts to pivot towards electrification include partnerships with Mitsubishi and Honda, but the company remains behind competitors such as Tesla.
“We have no choice but to partially revise the plan,” Uchida said, expressing regret over the challenges faced in the initial year of the Arc plan. He pledged that the company would become “leaner and more resilient” as it restructures.
On the Toyko Stock Exchange, Nissan is trading down 4.62% at ¥367. This is a 37% drop over the past year.