YOKOHAMA, Jan 29 — Nissan is planning aggressive cost cuts to deal with an unexpected slump in sales as the expansionist strategy it inherited from fugitive former Chairman Carlos Ghosn flounders, four people familiar with the plans said. Japan’s second biggest carmaker is set to eliminate at...
Workmen prepare to clean a large Nissan sign on the exterior of their Sunderland Plant in Sunderland, North East England November 12, 2014. — AFP pic
“The situation is dire. It’s do or die,” a person close to Nissan’s senior management and the company’s board told Reuters. Now, many of those models are missing sales goals and executives at Nissan’s Yokohama headquarters estimate up to 40% of its global manufacturing capacity is unused, or under-used.
People familiar with the plans said the axe was also likely to fall at Nissan’s North American head office in Tennessee and its European headquarters in Geneva, as they were bloated with high-spending sales and marketing staff. Nissan is aiming to achieve an operating margin of 6% on revenue of ¥14.5 trillion by March 2023, compared with 3.0% from 13.0 trillion forecast for the year ending in March 2020, according to plans announced in July.
Three of the people said the collapse in Nissan sales around the world was a major factor in forcing the company to consider restructuring above and beyond the measures outlined in July. One especially troublesome issue for Nissan has been its sales efficiency. In 2018, it had 69 models and sold 5.2 million vehicles — or 75,000 on average per model line — and it was planning to expand its line-up to 73 by the end of 2022.
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