Nissan to cut 9,000 jobs, reduce global production by 20% as income plunges – sales slump in China and US

Things are not looking good over at Nissan, with Japan’s third-largest automaker announcing that it is set to cut 9,000 jobs – or around 6.7% of its 133,580 global workforce – as it grapples with a drastic slump in sales and the resulting losses from that.

The company reported a nine billion yen (RM259 million) loss in the third quarter, a drastic change from the 191 billion yen (RM5.49 billion) profit it recorded in the same period last year. The turn for the worse has seen the automaker lowering its annual profit outlook by 70% to 150 billion yen (RM4.3 billion), the second time it has revised numbers this year.

It added that it would reduce its global production capacity by 20%. The company has 25 vehicle production lines globally and plans to reduce the maximum capacity of those, chief monozukuri (manufacturing) officer Hideyuki Sakamoto said. One method would be to change line speeds and shift patterns in factories, he explained.

The automaker is also set to cut its sales budgets and sell up to 10% of its stake in Mitsubishi Motors to raise up to 68.6 billion yen (RM1.98 billion), Reuters reported. However, the brand added it would deepen the collaboration with Mitsubishi and also with Renault as it looks to reduce vehicle development lead time to 30 months.

Like many foreign automakers, Nissan is struggling in China, with local brands having gained considerable market share through a host of affordable EVs and hybrids. Its global sales fell 3.8% to 1.59 million vehicles for the first half of the financial year, largely due to a 14.3% drop in China.

Meanwhile, it is suffering in the United States due to the lack of right models. Sales in that market fell almost 3% to about 449,000 vehicles. According to CEO Makoto Uchida, the company misread demand for hybrids in the US.

“We didn’t foresee HEVs ramping up this rapidly. We did start to understand this trend towards the end of last fiscal year,” he said, adding that making some changes to core models didn’t also go as smoothly as planned.

Uchida said he would voluntarily reduce 50% of his monthly compensation starting this month and added that other executive committee members will also voluntarily take a pay cut. He however declined to provide details about the timing or locations where the job and production cuts would be made.

Looking to sell your car? Sell it with Carro.