TOKYO – Nissan Motor Co.’s struggle to cope with tougher car industry conditions and address weaknesses within its business has spiralled, leaving the automaker with no choice but to slash payroll, production and its forecasts for this fiscal year.
The Japanese company will dismiss 9,000 workers globally and reduce capacity by a fifth, among other cost-cutting measures, after net income plummeted 94 per cent in the first half.
Nissan also will sell off some of its stake in Mitsubishi Motors Corp. after burning through ¥448.3 billion in cash during the last six months.
The calamitous results will prove costly for chief executive Makoto Uchida, who’s forfeiting half his compensation starting this month.
The CEO told investors Nissan has been affected “not only by external challenges, but also by our specific issues,” alluding both to the breakneck rise of Chinese automakers and Nissan setting overly ambitious sales targets.
“Meeting our sales goals will be a challenge,” Mr Uchida said. “We need to rebuild our strength so that we can pivot toward a more positive direction.”
Nissan now sees its operating income plunging to just ¥150 billion in the fiscal year ending in March, down 70 per cent from its previous forecast. Management also lowered their revenue outlook by more than 9 per cent, meaning they now expect virtually no growth for the year.
Mr Uchida has been at the helm since 2019, when Nissan was facing an existential crisis in the wake of former chairman Carlos Ghosn’s departure. He’s had trouble righting the ship while facing stiff competition from the likes of Tesla Inc. and China’s BYD Co., rendering the company a laggard among major Japanese automakers.
“Nissan is the weakest one,” said James Hong, an analyst at Macquarie Securities Korea. “The only way for the company to improve