Nissan reported a financial loss for the most recent fiscal quarter, attributing it to a significant decline in vehicle sales alongside rising costs and inventory levels. As a consequence, the Japanese automaker announced it would eliminate 9,000 positions globally, which represents roughly 6% of its workforce of over 133,000 employees.
Chief Executive Makoto Uchida acknowledged his accountability for the disappointing financial performance by agreeing to a 50% reduction in his salary. He expressed confidence that a restructuring plan would lead to a recovery for the company.
The vehicle manufacturer unveiled intentions to cut its global production capacity by 20% in conjunction with the job cuts. Uchida refrained from providing specific details on which regions would be impacted by this downsizing.
In the quarter ending September, Nissan registered a loss of 9.3 billion yen (approximately $60 million), a stark contrast to the 190.7 billion yen profit reported during the same period last year.
Sales for the quarter also saw a decline, dropping to 2.9 trillion yen ($19 billion) from 3.1 trillion yen previously. Uchida recognized the company’s inability to adapt swiftly to evolving global market conditions and escalating costs of raw materials.
He stated, “I take this situation very seriously. Nissan will restructure its business to become leaner and more resilient,” while highlighting the necessity for a comprehensive review of all operational aspects and future strategies.
Despite the company’s rich history, Nissan has struggled in the U.S. market, currently a battleground for major automakers like Ford, Toyota, and Tesla. This dip in performance has prompted extensive reflection on their approach moving forward.
Headquartered in Yokohama, Nissan disclosed that its sales revenue for the first half of the fiscal year amounted to 5.98 trillion yen ($39 billion), representing a slight decrease of 1% compared to the previous year’s 6 trillion yen figure. The profit during this period was noted at 19.2 billion yen ($124 million), a sharp decline from the 296.2 billion yen earned in the same timeframe last year.
Due to these circumstances, Nissan revised its annual sales revenue forecast for the fiscal year ending March 2025 down to 12.7 trillion yen ($82 billion), from an earlier estimate of 14 trillion yen ($91 billion). The company did not provide a net profit forecast, citing prevailing uncertainties, but assured that a clearer outlook would be presented as soon as feasible.
Previously, Nissan had anticipated an annual profit of 300 billion yen ($1.9 billion). The company now expects to sell about 3.4 million vehicles globally for the fiscal year, a reduction from the earlier estimate of 3.65 million units. This anticipated number mirrors total vehicle sales from the previous fiscal year.
To aid in the turnaround, Nissan announced the appointment of a chief performance officer, who will be responsible for critical decision-making in the restructuring process, and is set to start next month. In light of its financial difficulties, the company also confirmed that no dividends would be distributed this fiscal period.
