Nissan's woes deepen as more job cuts loom
Along with a year-on-year loss, the automaker will reduce its workforce by an additional 15%.
Nissan has posted its biggest operational loss in almost 25 years. Photo by Kazuhiro NOGI / AFP
Nissan plans to cut 10 000 more jobs worldwide, Japanese media reported on Monday, a day before the struggling carmaker was expected to report a record annual loss of around R5-million or R91-billion.
Public broadcaster NHK said the decision, in addition to a November announcement that it would slash 9 000 positions, means Nissan is now aiming to reduce its total workforce by approximately 15%.
Nissan, whose mooted merger with Honda collapsed earlier this year, declined to comment on the reports which also appeared in the Nikkei business daily.
Timeline of tough
Like many peers, Nissan is finding it difficult to compete against home grown electric vehicle brands in China, while its profits are now under further threat from US trade tariffs.
The possible merger with Japanese rival Honda had been seen as a potential lifeline. But talks crashed in February after Honda proposed making Nissan a subsidiary instead of integrating under a holding firm.
Then last month, Nissan issued a stark profit warning, saying it expects an annual net loss $5.1-billion or R93-billion for the 2024-25 financial year.
ALSO READ: Nissan CEO Makoto Uchida officially steps down
Its previous worst full-year net loss was 684 billion yen (R85-billion) in 1999-2000, during a financial crisis that birthed its rocky partnership with Renault.
Nissan has since faced more speed bumps, including the 2018 arrest of former boss Carlos Ghosn.
The automaker, whose shares have tanked nearly 40% over the past year, appointed a new CEO in March.
Ratings agencies have downgraded the firm to junk, with Moody's citing its 'weak profitability' and 'ageing model portfolio'.
Tariffs threat
An additional headwind is the 25% tariff imposed by President Donald Trump on all imported vehicles into the United States.
Of all Japan's major automakers, Nissan is likely to be the most severely impacted, Bloomberg Intelligence analyst Tatsuo Yoshida told AFP.
Its clientele has historically been more price-sensitive than that of its rivals, he said.
Recently appointed Nissan CEO, Ivan Espinosa. Photo by Richard A. Brooks / AFP
So the company 'can't pass the costs on consumers to the same extent as Toyota or Honda without suffering a significant loss in sales units', he added.
One potential solution for Nissan could be Taiwanese electronics behemoth Hon Hai, better known as Foxconn, which assembles iPhones and is expanding into cars.
Foxconn said in February it was open to buying Renault's stake in Nissan, and this month it agreed in principle to develop and supply an EV model to Mitsubishi Motors, an alliance partner of Renault and Nissan.
External help, Yoshida said, is 'very much needed' for Nissan, which can no longer differentiate itself from its rivals by making internal efforts to save costs alone.
NOW READ: Nissan announces drastic job cuts and reduction in sales figures
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