Nissan’s troubles are part of a broader turbulent period marked by the high-profile 2018 arrest of former Chairman Carlos Ghosn, who later fled Japan while facing charges of financial misconduct.
Japan – Nissan, the Japanese automaker, announced on Thursday that it will cut 9,000 jobs and lower its annual sales forecast as it grapples with “a severe situation” in the global automotive market.
The company has been facing significant challenges, including declining sales in North America and growing competition from China’s electric vehicle (EV) companies, which benefit from strong government support.
The automaker reported a staggering 93% drop in net profit for the first half of the fiscal year. CEO Makoto Uchida attributed the dismal performance primarily to weak sales in North America. Uchida outlined plans for restructuring the company, including a 20% reduction in global production capacity and workforce cuts. “Nissan is taking urgent measures to turn around its performance and build a leaner, more resilient business capable of adapting swiftly to market changes,” the company said in a statement.
Financially, Nissan has revised its net sales projection to 12.7 trillion yen ($80 billion), down from an earlier forecast of 14 trillion yen. However, it did not issue a new net profit forecast, having downgraded this to 300 billion yen in July. For the six-month period ending in September, Nissan’s net profit stood at just 19.2 billion yen. “Net income is still being assessed due to ongoing cost evaluations for the planned turnaround efforts,” Uchida explained.
In response to the crisis, Uchida and other top executives will take voluntary pay cuts. Starting in November 2024, Uchida will forfeit 50% of his monthly compensation, with similar reductions applying to other executive committee members. Uchida emphasized that restoring Nissan’s brand strength and managing costs effectively in the North American market are key priorities. “We will rebuild our brand in America,” he said.
In another strategic move, Nissan plans to reduce its stake in Mitsubishi Motors. The automaker will sell shares back to Mitsubishi, lowering its stake from 34% to approximately 24%. Despite the reduction, Uchida noted that Nissan will maintain a close partnership with Mitsubishi.
Nissan’s troubles are part of a broader turbulent period marked by the high-profile 2018 arrest of former Chairman Carlos Ghosn, who later fled Japan while facing charges of financial misconduct. Ghosn, who remains in Lebanon and denies the allegations, has stated that he escaped because he did not believe he would receive a fair trial in Japan.
Commenting on the election of Donald Trump as U.S. President, Uchida remarked that Nissan is closely monitoring potential policy changes, such as tariffs, that could impact the industry. “We will be lobbying and maintaining the direction of our medium- to long-term plans, but we will proceed cautiously,” he added.
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