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Nissan reveals plans to dramatically reduce costs during the fiscal 2027, striving to close seven plants and reduce 20,000 jobs much more than planned just a while ago.
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The carmaker plans to reduce the number of platforms from 13 to 7 in the next 10 years, and will also take extensive measures to reduce complexity in its global composition.
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Nissan faces challenges that have materialized for a long period of time while the automobile manufacturer pursues volume, while neglecting to keep up with competitors in technology.
Nissan revealed this week that it will release about 20,000 employees between now and 2027, compared to 9,000, as foreseen just a few months ago, in addition to closing seven factories around the world until the same year.
The upcoming cuts, part of what the carmaker openly called a “recovery plan” called Re: Nissan, will reduce the number of plants from 17 to only 10. Nissan currently has three installation plants in the United States (with 16,000 production jobs) and one in Mexico.
Nissan said about 300 people will be tasked with focusing only on cost reduction initiatives as part of the plan.
“The main aspect of this transformation involves rethinking the supply chain. Nissan will restructure its supplier panel to provide more volume for less suppliers, eliminating ineffectiveness and challenging hereditary standards,” the automaker said.
Nissan intends to reduce engineering costs, reduce the complexity of parts by 70%, and to optimize its power strategy, which will include cancellation of a planned lithium iron phosphate (LFP) battery in Kyushu, Japan.
Nissan also plans to shorten the development time of vehicles from 37 months to 30, and by 2035 the automaker plans to rely on only seven global platforms, compared to 13 today.
The automaker said it would take the market -specific approach as far as the decisive regions are concerned.
“In the US, it includes addressing the rapid expansion of segments such as hybrids and revitalizing the Infiniti brand through Nissan brand synergies,” the carmaker notes.
Nissan, as other car manufacturers, is now facing a major competition in China, which has a rapid rise in home carmakers who put pressure on more apparent car giants. VCG – Getty Images
In general, Nissan provides aggressive moves of cost reduction aimed at rapidly adjusting the rapid deterioration of the financial picture, which is short for some time.
How did Nissan end up in this position?
It would be too easy to blame for the shocks of the post-adminal automotive industry for Nissan’s decline. But some of the roots of the current crisis of the company-maybe its most serious this century-probably stemmed from the Nissan volume strategy under former CEO Carlos Ghosn, which prioritizes the sales of models at a lower price.
Nissan’s new president and CEO Ivan Espinosa acknowledged as much as much.
“Before the challenging efficiency of FY24 and increasing variable costs complicated by an uncertain environment, we must prioritize cultivation with greater urgency and speed, striving for profitability that relies less on volume,” Espinosa said.
Over the past decade and a half, they have observed a decrease in Nissan’s inertia in a number of decisive markets as the automaker has been moving slowly to respond to new competitors in new segments. Nissan was also slow to innovate in the fast -changing landscape, even in segments that were its main since the 90s.
The car manufacturer neglects to expand and update its offers for batteries after launching the first -generation sheet until recently, with the delayed Ariya debut, although the BEV models still represent a relatively small percentage of its sales.
Nissan was an EV pioneer at the beginning, but the company had not turned to segments that Tesla had quickly shot in the last few years. Nissan is now facing the task of catching up with a dozen car manufacturers, including Tesla.
In the US, Nissan may have moved too slowly to respond to a decline in the popularity of sedans of various sizes, having dominated these segments along with Honda and Toyota for quite some time, while not fast enough to update its crossovers.
Meanwhile, the Infiniti brand had not received sufficient attention in the last decade after several sporadic successes in the early 2000s and is now facing an increasingly uncertain future.
Most recently, Nissan saw a quick conversation with mergers with Honda Collapse, underway, which was considered a missing decisive rescuer who could raise both automakers to the greater competition from South Korea and China.
According to the new plan, Nissan aims to return to operational profitability until fiscal 2026.
“As a new government, we are taking a reasonable approach to reassess our goals and actively seek every possible opportunity to apply and secure a stable recovery. Re: Nissan is a recovery plan based on actions that obviously outlines what we need to do now,” Espinosa added.
Overall, the continuous rise of Chinese car manufacturers is likely to determine the second half of the decade for Nissan and other Japanese car manufacturers who are struggling to keep their market shares in several key regions.
What vehicles should they add to their American staff To restore buyers’ attention? Tell us what you think in the comments below.