Nissan Motor Co., Ltd again fell into poor business performance, and the company decided to take restructuring measures such as reducing personnel and production capacity. Investors reacted strongly to the move, with some pointing to fundamental issues of brand strength as well as intensifying competition in major markets such as the US and China, and the company’s stock price fell sharply. in trade on the 8th.
The day before, Nissan revised its operating profit forecast for this fiscal year (ending March 2025) to 150 billion yen, down 70% from the previous plan. Although there were signs of sluggish sales in the US and China, the price was lowered to a level well below market expectations, leading to widespread disappointment. Nissan’s stock price temporarily fell 10% from the previous day to 368.5 yen in trading on the 8th, marking the lowest intraday price in about four years as of October 30, 2020.
The company has failed to introduce hybrid vehicles (HVs), which are in high demand in the US, Nissan’s biggest market, and has become more reliant on sales incentives, leading to a significant drop in profitability . Furthermore, in the Chinese market, where local companies such as BYD continue to expand their share, foreign companies, including Nissan, continue to struggle. In the sales plan for this fiscal year presented this time, the number of units in each region has been revised down from the previous forecast, and the slump is not limited to the US and China.
SMBC Nikko Securities analyst Hajime Maki pointed out that the second-quarter operating profit and full-year plan announced this time were “results that cannot be surprising given the recent slump in sales”. He expressed the view that weak brand power and the lack of HVs in the product line in North America remain “essential issues.”
Nissan announced this in Marchmanagement planThe company planned to launch a model equipped with Nissan’s proprietary hybrid technology, “e-POWER,” in the United States in fiscal 2026. At a press conference on the 7th, Nissan President Makoto Uchida said that they are working to bring forward the launch of vehicles with e-Power equipment and plug-in hybrid vehicles in the United States several months ahead of the medium-term plan, but To be honest, I don’t think we can do that suddenly in the next fiscal year.””We can’t do that,” he said, adding that the company will make the sales force and the she has brand power already rebuilt as she rebuilds her business.
Nissan, which broke away from the expansion strategy under former chairman Carlos Ghosn and has been working to improve its “sales quality” in recent years, aims to increase sales by 1 million units and improve profit margins by plan, but market participants. There was concern that the target was too high. President Uchida expressed his intention to revise these goals as the discrepancy from the goals became apparent due to slow sales.
Julie Boot, an analyst at British research firm Pelham Smithers Associates, said in a note that Nissan’s problems “cannot be easily solved by cutting jobs or reducing production capacity.” Nissan’s performance, previously plagued by slow sales, excess production capacity, and reliance on incentives, has rebounded due to high demand in response to the weaker yen and supply shortages “The market environment is not as good as it was.”
In the United States, former President Trump, who campaigned for higher tariffs, won the presidential election, creating a new source of uncertainty for Nissan. Said Mr. President Uchida said that even if Trump returns, the direction of the company’s medium and long-term initiatives will not change, and he will continue to closely monitor trends.
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Interview Between Time.news Editor and Automotive Expert
Time.news Editor: Welcome to Time.news! Today, we have a pressing issue to discuss with Dr. Emily Carter, an automotive industry expert, about Nissan’s recently announced restructuring measures and its impact on the company’s future. Thank you for joining us, Dr. Carter.
Dr. Emily Carter: Thank you for having me! There’s a lot to unpack with Nissan’s current situation.
Editor: Absolutely. Just recently, Nissan announced significant restructuring efforts to tackle poor business performance, including staff cuts and reduced production capacity. What are the immediate implications of these measures?
Dr. Carter: Well, firstly, these steps indicate that Nissan is responding to not just temporary market fluctuations but to deeper-rooted issues, such as brand strength and competitive pressures in key markets like the U.S. and China. Reducing personnel and production capacity can help cut costs in the short term, but it raises concerns about their long-term strategy and commitment to innovation.
Editor: Speaking of competition, Nissan’s stock price plunged after the announcement—down 10% to its lowest level in about four years. What does this signal about investor sentiment toward the brand?
Dr. Carter: The sharp decline in stock price reflects profound investor disappointment. Nissan has revised its operating profit forecast for the fiscal year ending March 2025 down to 150 billion yen, a staggering 70% drop from its previous estimates. Investors are likely worried not just about the numbers, but about the overall viability of Nissan’s brand in a market increasingly dominated by competitors, especially local firms in China and emerging players in EV markets.
Editor: The article pointed out that Nissan has struggled to launch hybrid vehicles in a market heavily leaning towards them—especially in the U.S. Why is this significant?
Dr. Carter: The U.S. market has shifted dramatically towards hybrid and electric vehicles. Nissan’s failure to introduce competitive hybrid models in this region poses a serious risk. While competitors are advancing their offerings, Nissan is increasingly relying on sales incentives to boost numbers, which is not a sustainable strategy. This growing dependency can erode brand loyalty and overall profitability in the long run.
Editor: Analysts like Hajime Maki have identified weak brand power and the lack of hybrid options as central to Nissan’s challenges. How crucial are these issues for the company going forward?
Dr. Carter: These factors are absolutely critical. A strong brand is essential for consumer trust and loyalty, especially in the automotive sector. If Nissan cannot differentiate itself from competitors with innovative and appealing products, it’s going to struggle. Their plan to bring forward hybrid models like the e-POWER might be too little, too late if they fail to regain consumer interest quickly.
Editor: Nissan’s president, Makoto Uchida, mentioned accelerating the launch of new hybrid and plug-in hybrid vehicles. How realistic is this timeline, considering their current issues?
Dr. Carter: While I admire the ambition, accelerating product launches is challenging. It requires a well-coordinated supply chain, robust manufacturing capabilities, and significant R&D investments. If Nissan is serious about competing in the hybrid space, they need to ensure they have the necessary resources aligned to meet this ambitious timeline. Otherwise, it risks further disappointing investors and consumers alike.
Editor: It seems like Nissan is at a crossroads. What do you think the path forward looks like for them?
Dr. Carter: They must quickly innovate their product lineup to include hybrids and coherent electric vehicle strategies while also reinforcing their brand identity. A clear communication strategy to their investors and confidence-building measures can help restore trust. However, it’s essential they act swiftly—because in today’s fast-paced automotive landscape, the cost of inaction can be devastating.
Editor: Thank you, Dr. Carter, for sharing your insights on Nissan’s current challenges. It will be interesting to see how these developments unfold in the coming months.
Dr. Carter: Thank you for having me! I look forward to seeing how Nissan navigates this pivotal moment in their history.