Nissan reports a record loss of $4.5 billion!

Nissan announces a disastrous 2024 financial year, illustrating its difficulties in keeping up with modern automotive industry trends.

We knew Nissan was in significant trouble, but the reality far exceeds the worst forecasts. The Yokohama-based brand reported a net loss of 670 billion yen ($4.5 billion) for the 2024 fiscal year. This period precedes the implementation of new 25% taxes on automobiles in the United States, so there are no mitigating circumstances for this fiasco.

It is the third-largest loss in Nissan’s history. To respond, the company plans to eliminate more than 10,000 jobs, in addition to the 9,000 already announced, representing a total reduction of approximately 15% of its workforce.

“These financial results should wake us up”, stated CEO Ivan Espinosa, who has been in position for a month. This statement, which might seem trivial, contrasts with the usual public excuses common in Japan. It highlights that Nissan faces high costs and an unstable global market, making investments difficult.

Cost-cutting and layoffs

To improve the situation, Nissan now aims to cut its fixed and variable costs by $4 billion by 2026, and to reduce its production sites from 17 to 10. This strategy is called RE:NISSAN and is much more ambitious than the previous one, which analysts considered too cautious.

The arrival of a new management team, blending foreign executives and young Japanese employees, could accelerate decision-making. This approach is different from the previous team, perceived as too slow and led by experienced Japanese leaders. Former CEO Makoto Uchida resigned following criticism of his leadership. During his tenure, Nissan started negotiations to merge with Honda, but these discussions failed in February. Honda wanted Nissan to become a subsidiary, which Nissan refused.

Although the merger project is no longer ongoing, the two companies will continue collaborating on technologies related to electric and smart vehicles. Nissan faces many challenges, but the market seems confident. The stock rose by 3% this Tuesday after losing more than a third of its value over the past year. Finance and its mysteries…