Nissan sets out survival plan after first loss in 11 years

The logo of Nissan is seen on a car through a fence at Nissan factory at Zona Franca during the coronavirus disease outbreak in Barcelona, Spain. REUTERS

Nissan Motor Co unveiled a plan to become a smaller, more cost-efficient automaker on Thursday as it looks to recover from four years of tumbling profits that culminated in its first annual loss in 11 years.

Under a new four-year plan, the Japanese carmaker will slash its production capacity and model range by about a fifth to help cut 300 billion yen ($2.8 billion) from fixed costs as it fights for survival in a market hit badly by the coronavirus pandemic.

Nissan is aiming for a 5 percent operating profit margin and global market share of 6 percent under what is its second recovery plan in less than a year.

Nissan posted an annual operating loss of 40.5 billion yen for the year to March 31, its worst performance since 2008/09. Its operating profit margin was -0.4 percent.

The automaker sold 4.8 million vehicles during the period, the second decline in a row and a fall of 13 percent from last year, knocking it off its perch as Japan’s second biggest automaker to trail Toyota and Honda.

Nissan workers protest in front of the Barcelona factory against the closure of the plant at Zona Franca, during the coronavirus disease outbreak in Barcelona, Spain. REUTERS

The plan follows a new strategy announced by Nissan and its partners Renault and Mitsubishi Motors on Wednesday to work more closely on developing and producing cars to reduce costs and ensure the group’s continued existence.

Even before the spread of the novel coronavirus, Nissan’s slumping profits had forced it to row back on an aggressive expansion plan pursued by ousted leader Carlos Ghosn. The pandemic has only piled on the urgency to downsize.

Nissan’s operating profit has tumbled for four consecutive years as its pursuit of market share, particularly in the United States, led to overcapacity at its car plants, steep discounting and a cheapened brand.

The new four-year strategy lays out a path to sustainable profitability and is the vision of Chief Executive Makoto Uchida and Chief Operating Officer Ashwani Gupta, who took over after months of internal turmoil following Ghosn’s arrest in 2018.

Under the plan, Nissan will curb its ambitions for sales growth to target annual sales of about 5 million units, Reuters reported in April, a cut from a previous goal of 6 million cars outlined in July by then-CEO Hiroto Saikawa.

Another top priority will be the preservation of cash. As of December, Nissan’s automotive operations had negative free cash flow of 670.9 billion yen, a more than six-fold increase from a year ago.

Spain says Nissan has decided to close its Barcelona plant

Japan’s Nissan Motor Co has decided to close its factory in Barcelona, resulting in the loss of about 3,000 jobs as part of a worldwide restructuring plan, the Spanish government said on Thursday.

The move is a blow for Spain at a time when unemployment is increasing, with a steep recession looming because of the coronavirus crisis.

The government, which had said in January after a meeting with leaders from Renault and Nissan that jobs at the Barcelona plant were “guaranteed,” urged the Japanese carmaker to look at other options for the Barcelona plant.

Nissan workers protest in front of the Barcelona factory against the closure of the plant at Zona Franca, in Barcelona, Spain. REUTERS

A Nissan Spain spokesman and a union leader did not immediately respond to a request for comment

“We obviously regret this decision,” Economy Minister Nadio Calvino told broadcaster TVE, saying the government would continue to work with Nissan and local and regional authorities “to see how to proceed and maybe look for an alternative solution”.

Nissan’s main plant in Barcelona employs about 2,400 workers with another 600 workers in several related facilities. It’s Nissan’s main plant in Europe after one in Britain.

The closure could indirectly affect up to 25,000 jobs, unions have said.

Nissan workers have been staging protests since early May after the company only partially resumed its production following what was then a temporary shutdown because of the coronavirus pandemic.

Unions have said they plan to form a human chain around Nissan’s main Barcelona plant later on Thursday.

The Barcelona plant, which mainly produces an electric van and a pick-up truck, has been operating at well under its maximum capacity, leading to protests from workers, who have complained of a lack of a clear roadmap and been on strike since early May. (REUTERS)

Related post

Keeway launches the SR 250 at INR 1.49 lakh

Keeway India, a hungarian-based two wheeler company, has launched its much anticipated model–the SR 250–at the Auto Expo 2023.

Read More

2022 KTM Adventure 390 launched in India

KTM has officially revealed the updates on the Adventure 390. The all-new 2022 Adventure 390 comes with major upgrades to the bodywork and features, such as the addition of two-mode traction control: street mode and off-road mode.

Read More

TVS Ntorq 125 XT launched in India

TVS Motor Company has launched its new scooter–the Ntorq XT–in India. The newly launched scooter is the company’s most expensive model in its Ntorq-125 series. The XT is based on Ntorq’s disc brake variant, but comes loaded with new features and technology. The scooter has been launched in India at a starting price of INR 1.03 lakh.

Read More

Ioniq 5, Kia EV6, and Taigun nominated for the 2022 World Car Awards

The Hyundai Ioniq 5, Kia EV6, and Volkswagen Taigun have all made it to the 2022 World Car Finals in their respective categories. The Ioniq 5 has been nominated in three different categories, the EV6 in two, and the Taigun in one.

Read More

GWM Haval H6 earns five-star ANCAP safety rating

Great Wall Motor’s (GWM) HAVAL H6 has received high scores in the rigorous Australasian New Car Assessment Program (ANCAP) crash test,

Read More

Shadow Top Brand Shadow