Critical Situation for Nissan with Abyssal Losses

Nissan Revises Down Its Earnings Forecasts with Increased Losses. And These Are Just Estimates…

Nissan forecasts a massive loss of $4.9 to $5.3 billion for the fiscal year ending in March, due to declining sales and asset depreciation, announced the struggling Japanese automaker on Thursday. Initially, Nissan had anticipated a loss of $561 million. However, the revaluation of its manufacturing assets in North America, Latin America, Europe, and Japan led to depreciation charges exceeding $3.5 billion.

The projected annual sales amount to 3.35 million vehicles, below the 3.4 million announced in February. These are only forecasts that still need to be refined before the financial results are published on May 13. Unfortunately, it is rare for the final figures to be more optimistic than the forecasts.

To face this crisis, Nissan has reduced production at its US factories and offered voluntary departures to its employees. Some analysts believe that the lack of appeal of its product range, especially in key markets like the United States and China, is at the root of this situation.

Despite its pioneering role in electric vehicles (EVs) with the Leaf, launched in 2010, Nissan has fallen behind competitors like Tesla and BYD in both EVs and hybrids. However, Nissan highlights its strong financial position, with a net cash of $10.5 billion and cash flow of $24 billion for the 2024 fiscal year.

“Despite these challenges, we have solid financial resources, a promising product lineup, and the will to turn Nissan around in the coming years,” said Ivan Espinosa, the new CEO since April 1, succeeding Makoto Uchida.

Espinosa also confirmed the end of discussions with Honda regarding an integration of the two companies, while continuing their collaboration on EVs and autonomous driving technologies. Will salvation come from electronics giant Foxconn as increasingly persistent rumors suggest?