Nissan will look to save a whopping $4 billion as it is forced to pull itself out of its current financial difficulties following the breakdown of its merger talks with Honda and Mitsubishi.
The three companies formally announced the previously reported news that they could not agree to a partnership, leaving Nissan in the lurch as it struggles with debt and slowing demand for its products around the world.
Despite this, Nissan president and CEO Makoto Uchida is confident that the company’s new plan, of cutting costs and jobs while updating its entire line-up, will be enough to save the famous brand.
“Nissan is fully committed to its turnaround actions, aiming to reduce costs by around 400 billion yen (approx. $4b),” Uchida said. “We are dedicated to achieving a more efficient cost structure while driving top-line growth through enhanced competitive products that cater to the diverse needs of our customers. We are executing our turnaround—centered on efficiency and growth—with pace and purpose.”
At the heart of these cost savings are plans to shed 2500 “global indirect employees”, but this will be followed by even more dramatic cuts in the coming years. Significant savings will come from what the company is calling “rightsizing” its production plants and direct employees, with plans to consolidate production lines and labour shifts over the next two years to cut 6500 jobs. This will ultimately see Nissan reduce its global production by 20 per cent by the end of the 2026 fiscal year.
But obviously a car company can’t survive without offering appealing cars to consumers, so it plans to follow up the recently updated Qashqai and new Patrol with new plug-in hybrids in 2025 and ‘26, plus a long-overdue replacement for the Leaf electric car, as well as introducing an all-new electric model targeted specifically at the important Chinese market.
The good news is, Nissan will have some help in this project, with Honda and Mitsubishi agreeing to work together on new electrified vehicles and in-vehicle technology.
A joint statement from the three said: “Going forward, the three companies will collaborate within the framework of a strategic partnership aimed at the era of intelligence and electrified vehicles. This framework was established with the MOU signed on August 1 last year, striving to create new value and maximize the corporate value of each company.”
Nissan has also not entirely given up on finding help, admitting it will “conduct a strategic review in pursuit of partnership opportunities” that could help secure its long-term future.
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