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.

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.

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)