The company is expected to downsize and lower sales expectations by one million cars.
To say Nissan has been going through a rough patch would be quite the understatement as the company has been struggling for a significant amount of time. The whole debacle with the departure of former chairman Carlos Ghosn certainly didn’t help, nor did the coronavirus pandemic, so it comes as no surprise that high-ranked officials are planning a shake-up to adapt to the new reality.
Sources close to the matter cited by Reuters are saying Nissan will drastically reduce its annual sales target by one million cars in a new restructuring plan bound to be announced in May. In other words, the Japanese marque will set a new objective to sell five million cars per year compared to the previous goal of six million established by ex-CEO Hiroto Saikawa, a target which itself was much lower than Ghosn’s desire to move about eight million cars annually.
The restructuring plan is expected to last through March 2023 and would effectively turn Nissan into a smaller automaker as a sales target lowered by one million cars would have repercussions across the company. Reuters believe three or four factories could be shuttered, which would eliminate thousands of jobs following an already announced plan to reduce the workforce by 10 percent.
The aforementioned new sales target of five million vehicles could drop furthermore in light of the coronavirus outbreak, according to a senior company source cited by Reuters. Another person familiar with Nissan’s agenda admitted the company has never managed to sell significantly more than around five million cars despite setting optimistic targets of 7-8 million units for several years. These high numbers are “sort of wishful thinking” at this point, therefore the “resizing issue is really being taken into account,” according to a source within the company.
How bad is the situation at Nissan? Well, the automaker posted its biggest quarterly loss in a decade – ¥26.1 billion ($238 million) – for the October to December 2019 quarter. Automotive News Europe says the company is now seeking a $4.6-billion credit line to help it through these rough times amplified by the crisis in the automotive industry caused by the coronavirus outbreak.
If there is a silver lining to be found, vital new products are scheduled to be released this year, including the next-generation Qashqai / Rogue Sport, revamped X-Trail / Rogue, and a new Frontier pickup truck. A new Z model is also seemingly in the works, although a sports car is not expected to significantly move the needle in terms of sales.