Nissan Motor Corp. announced a loss for the latest fiscal quarter, reporting a 9.3 billion yen loss as vehicle sales declined and costs increased. In response to the challenging financial situation, the Japanese automaker revealed plans to reduce its global workforce by 9,000 employees, which accounts for about 6% of its total workforce of over 133,000 people. Additionally, Nissan intends to cut global production capacity by 20%.
The Chief Executive of Nissan, Makoto Uchida, expressed accountability for the disappointing results by taking a 50% pay cut. Uchida assured stakeholders that the company is committed to implementing a turnaround strategy to address the current challenges.
The decline in quarterly sales to 2.9 trillion yen from 3.1 trillion yen was attributed to various factors, including sluggish sales in the U.S. market, where Nissan models faced tough competition from other automakers like Ford, Toyota, and Tesla.
Nissan acknowledged that it failed to adapt swiftly to changing market dynamics and rising raw material costs. As a result, the company plans to restructure its operations to enhance efficiency and resilience.
Looking ahead, Nissan revised its sales revenue forecast for the fiscal year through March 2025 to 12.7 trillion yen from the initial projection of 14 trillion yen. The automaker refrained from providing a net profit forecast due to uncertainties but previously anticipated an annual profit of 300 billion yen.
In an effort to streamline decision-making processes for the turnaround, Nissan announced the appointment of a chief performance officer who will assume the role next month. The company also disclosed that no dividends will be distributed given the challenging financial performance.
Nissan aims to sell 3.4 million vehicles globally in the fiscal year ending in March 2025, a reduction from the earlier target of 3.65 million vehicles. The company emphasized its commitment to reviewing all aspects of its operations and strategies to navigate through the current difficulties.
