Tokyo (AFP) – Japan’s Nissan posted an annual net loss of $4.5 billion on Tuesday while saying it plans to cut 15 percent of its global workforce and warning about the possible impact of US tariffs. The heavily indebted carmaker, whose mooted merger with Honda collapsed this year, is slashing production as part of its expensive business turnaround plan.
“Nissan must prioritise self-improvement with greater urgency and speed,” CEO Ivan Espinosa told reporters. “The reality is clear. We have a very high cost structure. To complicate matters further, the global market environment is volatile and unpredictable, making planning and investment increasingly challenging.”
Nissan reported a net loss of 671 billion yen ($4.5 billion) for the financial year to March 2025. Its worst ever full-year net loss was 684 billion yen in 1999-2000, during a crisis that birthed its rocky partnership with French automaker Renault. Renault, which has nearly a 36 percent stake in Nissan, said Tuesday it expects to take a 2.2-billion-euro ($2.4-billion) hit in the first quarter due to Nissan’s turnaround plan. Nissan did not issue a net profit forecast for 2025-2026, only saying that it expects to see sales of 12.5 trillion yen.
“The uncertain nature of US tariff measures makes it difficult for us to rationally estimate our full-year forecast for operating profit and net profit, and therefore we have left those figures unspecified,” Espinosa said. Nissan’s shares closed three percent higher Tuesday after reports, later confirmed by the company, that it planned to slash a total of 20,000 jobs worldwide. “We wouldn’t be doing this if it was not necessary to survive,” Espinosa said of the cuts.
As part of recovery efforts, Nissan also said it would “consolidate its vehicle production plants from 17 to 10 by fiscal year 2027.” “In China, we will strengthen our market performance by unleashing multiple new-energy vehicles,” it added. Like many peers, Nissan is finding it difficult to compete against Chinese electric vehicle brands. A merger with Japanese rival Honda had been seen as a potential lifeline, but talks collapsed in February when the latter proposed making Nissan a subsidiary. Espinosa said Tuesday that Nissan remained “open to collaborating with multiple partners,” including Honda.
Nissan has faced numerous speed bumps in recent years, including the 2018 arrest of former boss Carlos Ghosn, who later fled Japan concealed in an audio equipment box. The automaker, whose shares have tanked nearly 40 percent over the past year, appointed Espinosa CEO in March. Ratings agencies have downgraded the firm to junk, with Moody’s citing its “weak profitability” and “ageing model portfolio.”
This month, Nissan shelved plans, only recently agreed, to build a $1 billion battery plant in southern Japan owing to the tough “business environment.” Of Japan’s major automakers, Nissan is likely to be the most severely impacted by US President Donald Trump’s 25 percent tariff on imported vehicles, Bloomberg Intelligence analyst Tatsuo Yoshida told AFP ahead of Tuesday’s earnings report. Its clientele has historically been more price-sensitive than that of its rivals, he said. So, the company “can’t pass the costs on to consumers to the same extent as Toyota or Honda without suffering a significant loss in sales units,” he added.
© 2024 AFP
