In an announcement made on Thursday, Nissan Motor Corporation disclosed that it anticipates recording a substantial loss ranging between 700 billion yen ($4.9 billion) and 750 billion yen ($5.3 billion) for the fiscal year ending March. This downturn stems from diminished sales figures and a devaluation of the company’s assets. This revelation compounds an already anticipated financial strain for the Japanese automaker, as earlier projections had suggested a smaller loss of 80 billion yen ($561 million).
The significant increase in anticipated losses is largely attributed to impairments, which entail a diminished value of assets, surpassing 500 billion yen ($3.5 billion). These impairments follow a comprehensive reassessment of production assets across multiple strategic locations, including North America, Latin America, Europe, and Japan. Furthermore, the company’s annual sales forecasts have been adjusted to an expectation of 3.35 million vehicles, a slight reduction from the earlier estimate of 3.4 million units announced in February.
Nissan, known for manufacturing popular models such as the Altima mid-size sedan and the Infiniti luxury line, is scheduled to announce its earnings results on May 13. Amidst these financial challenges, the company, headquartered in Yokohama, has made efforts to scale back production at its U.S. facilities and has extended buyout offers to workers in these plants. Industry experts have identified potential concerns with the attractiveness of Nissan’s vehicle lineup, which may be contributing to a downturn in sales across significant markets like the U.S. and China.
Although Nissan was an early innovator in electric vehicles (EVs), launching the Leaf model in 2010, it has since lagged behind competitors in both the electric and hybrid vehicle sectors. Rivals like Tesla in the United States and Byd in China have capitalized on these markets more effectively, presenting aggressive competition.
Despite these hurdles, Nissan retains a strong financial base. The company projects that by the end of the fiscal year in 2024, it will have approximately 1.5 trillion yen ($10.5 billion) in net cash, with liquidity levels reaching around 3.4 trillion yen ($24 billion). In a statement, Chief Executive Ivan Espinosa emphasized, “Despite these challenges, we have significant financial resources, a strong product pipeline, and the determination to turnaround Nissan in the coming period.”
Espinosa, who took over the helm from Makoto Uchida on April 1, is focused on enhancing the agility of Nissan’s operations. Earlier in the year, Nissan concluded discussions with Honda Motor Co., another influential Japanese automaker, about a potential business integration and formation of a joint holding company. Nonetheless, both entities will continue collaborating on advancements in electric vehicles and smart car technologies, including autonomous driving capabilities.