Ailing Nissan announces drastic 'Re:Nissan' recovery plan

Nissan, regarded as one of Japan's 'Big Three' carmakers, looks set for a choppy couple of years ahead as the fresh release of its full year financial results for 2024 indicated a sharp drop from the performance of the years prior. In response, the brand has unveiled a sweeping recovery plan (named 'Re:Nissan'), which will comprise massive job cuts and factory closures as it aims for positive operating profitability and free cash flow by the 2026 financial year.

In its announcement, Nissan revealed that it had posted an operating profit of approximately $620 million (69.8 billion yen) for 2024 - a drastic 88% fall from 2023's operating profit of around $5.06 billion (568.7 billion yen). The carmaker delivered 3.346 million cars in 2024. 

Nissan President and CEO, Ivan Espinosa, has stated that the firm must prioritise self-improvement with greater urgency and speed 

Under 'Re:Nissan', the brand is now aiming for aggressive cost reductions while comprehensively restructuring its workforce and business operations.

Among the measures headlining the announcement is the elimination of a whopping total of 20,000 jobs, which include a previously announced reduction of 9,000. In the meantime, Nissan is hoping to cut the average cost per hour of its workforce by 20%.

Nissan will also shut seven out of its 17 production plants by the 2027 fiscal year. A lithium-iron phosphate battery plant, initially planned for construction Kyushu, has additionally been cancelled.

Simultaneously, part of the company's revamp of its development processes will involve the reduction of parts complexity while integrating and optimising its existing platforms.

Under 'Re:Nissan', Nissan is also aiming to reduce the number of its vehicle platforms from 13 to seven

The brand has plans to reduce the number of its vehicle platforms from 13 to seven by 2035, and also shorten the development lead time of its vehicles to 30 months eventually. Models set to benefit from this change include the all-new Nissan Skyline, an as-yet unnamed compact SUV slated for global markets, and an all-new compact SUV for its premium Infiniti sub-brand.

Speaking on the news, Nissan President and CEO, Ivan Espinosa, said, "We must prioritise self-improvement with greater urgency and speed, aiming for profitability that relies less on volume. As new management, we are taking a prudent approach to reassess our targets and actively seek every possible opportunity to implement and ensure a robust recovery." 

The Japanese carmaker has found itself mired in financial woes in recent years, as competition from price-competitive Chinese brands continues to intensify, and as global markets warm to electric vehicles. The brand is commonly seen as having blown the early lead it held in the electric field with the first generation Nissan Leaf, with the only other global BEV model in its lineup now being the Nissan Ariya. 

Despite its early lead with the Leaf in the early 2010s, Nissan has since lagged behind other carmakers in fielding fully electric models into global markets (Pictured: Nissan Ariya)

News of a potential merger with fellow 'Big Three'-carmaker, Honda, broke in December last year, and was initially seen as a promising lifeline for the firm. However, talks between both brands ultimately collapsed in February, sending Nissan's fate spiralling into further uncertainty. Following the news, Nissan announced that its former CEO, Makuto Uchida, would be stepping down for current CEO Espinosa to assume his position instead. Espinosa was previously Nissan's chief planning officer.

The firm has nonetheless reiterated its commitment to reinforced partnerships under 'Re:Nissan' - including its earlier-announced collaboration with Honda on vehicle intelligence and electrification. It will also continue several pre-existing projects with its alliance partners, Renault and Mitsubishi Motors, especially in the field of electric vehicles.