Nissan's CEO Makoto Uchida has just announced a series of significant changes aimed at guiding the company through turbulent times. Nissan plans to cut 9,000 jobs, which is about 6.7% of its global workforce, and reduce global production capacity by 20%. Additionally, Nissan will sell 149,028,300 shares of Mitsubishi, which will reduce its ownership stake in Mitsubishi from 34.07%, indicating a potential retreat from deeper alliances within the Renault-Nissan-Mitsubishi alliance.
The company states that while the launch of new models may be delayed, it will continue to develop 30 new or updated models as part of its “Arc” plan. This move is in response to sluggish sales and low profit expectations. In the third quarter of 2024, Nissan reported a net loss of 9.3 billion yen (around $61 million), a stark contrast to a profit of 191 billion yen (about $1.25 billion) in the same period last year.
As a result, Nissan has lowered its full-year revenue forecast to 12.7 trillion yen (approximately $83 billion) and now expects to sell 3.4 million vehicles in the current fiscal year, down from the previous estimate of 3.7 million.
Uchida stated, “We have no choice but to partially revise the plan.” He added, “It is extremely unfortunate to face this difficult situation in the first year of implementing the 'Arc' plan. I plan to lead our company towards future growth, and the lives of 130,000 Nissan employees and their families around the world rest on my shoulders. I feel a great responsibility as the leader of the company.”
According to Uchida, one area where Nissan has fallen behind is in hybrid vehicles, especially in the U.S. market, where demand for these vehicles remains high. The company is working to address this issue and is also looking to shorten overall development time to 30 months so that it can be more flexible and responsive to market conditions.
Fortunately, Uchida and other executives will face pay cuts, and he has personally decided to forgo half of his salary starting this month. This makes sense given the company now expects its annual profit to drop by 70%. This is the second time this year that Nissan has lowered its profit forecast, which is now expected to be 150 billion yen (approximately $975 million).
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