- With his turnaround strategy, Nissan is progressing with Honda after failed merger talks with Honda
- Nissan plans to reduce global production capacity by 20% and lose 9,000 jobs
- Nissan continues to examine the potential for new partnerships
Nissan described an updated turnaround strategy after the abrupt end of the fusion discussions with Honda last week. The proposed merger, worth around 60 billion US dollarswas widely seen as a potential lifeline for Nissan, which was exposed to sales and internal turbulence with top executives for years.
The car manufacturer announced its turnaround plan for the first time last autumn, and on February 13, Nissan confirmed the collapse of the merger talks on the same day. The The company expects to reduce costs With around 400 billion yen (approx. 2.6 billion US dollars) until the end of the 2026 financial year.
A main component of Nissan’s strategy includes Reduction of global production capacity by about 20%Reduction of five to four million vehicles. This leads to a reduction in the workforce of around 9,000 employees and the closure of three plants. The first facility, which was closed, is located in Thailand, which will take place in the 2025 financial year. The locations of the other two plants still have to be announced. The remaining factories can consolidate the production lines and adapt the shift patterns. In the United States, Nissan’s plants in Smyrna, Tennessee and Canton, Mississippi, have reduced shifts.
These measures will help to reduce Nissan’s break-even point from the currently 3.1 million vehicles to 2.5 million vehicles, whereby the company wants to achieve one achievement Stable operating margin of 4%.
Nissan CEO Makoto Uchida
In addition to reducing costs, Nissan focuses on improving efficiency. The company aims to speed up the vehicle development period and to increase the cost savings through larger similarities between the models. The first vehicle developed under this optimized approach is to be started in the 2026 financial year. Nissan also extends his line -up New plug-in hybrid models use of the growing consumer demand for hybrids.
In addition, Nissan announced plans to carry out a strategic review to examine new partnerships. On February 12th, Taiwaner contract manufacturer Foxconn confirms that it is in discussions with Nissan and is open to the acquisition of shares within the framework of every cooperation. According to reports, Nissan also speaks in conversations with a technology company for a potential partnership, similar to Honda’s collaboration with Sony, which led to the creation of her joint EV brand Afeela.
Nissan is not alone when it comes to increasing drastic changes in response to pressure from the transition to electric vehicles and competition by new participants, especially from China. The Volkswagen Group threatened last year Plants fall in Germany made an agreement with the unions last December last December. The plants are saved, but have to become more competitive. Around 35,000 jobs will also be removed by 2030, but only through retirement and voluntary measures.
While Nissan is progressing with his turnaround strategy, the company wants to regain its competitive advantage in a rapidly developing industry. Without them, leaders have warned that the car manufacturer may only have about a year to survive.
