Nissan Motor Co. Senior Vice President Jeremy Papin talks about Nissan's growth efforts on “The Big Money Show,” highlighting “breakthrough advances” in consumer EVs.
Nissan Motor Co., Ltd. announced that it will “take emergency measures'' to rebuild its business model after its consolidated net revenue and global sales volume declined and its operating profit margin fell to 0.5% in its financial results for the first half of fiscal 2024.
In a news release early Thursday, the company said it was “facing a challenging situation” and cut fixed costs by 300 billion yen (more than $1.9 billion) and reduced variable costs by 1,000 billion yen (more than $1.9 billion) while maintaining healthy free cash flow. billion yen ($649 million).
To achieve this goal, Nissan announced it will reduce its global production capacity by 20% and reduce its workforce by 9,000 people worldwide.
Nissan said, “We are implementing a variety of measures to reduce selling, general and administrative expenses, reduce cost of goods sold, rationalize our asset portfolio, and prioritize investments in capital and R&D.'' Ta.
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Nissan is cutting staff and CEO compensation after its consolidated net revenue and global sales volume declined and its operating profit margin was 0.5% in the first half of fiscal 2024. (Artur Widak/NurPhoto via Getty Images)
President and CEO Makoto Uchida volunteered to have half of his monthly salary immediately revoked, and other executive committee members also volunteered to take pay cuts.
Mr. Uchida said, “These restructuring measures do not mean that the company will downsize. Nissan is restructuring its business to become leaner and more resilient, while at the same time improving its management team to respond quickly and flexibly to changes in the business environment.'' We will reorganize.'' “we [can] Our goal is to strengthen the competitiveness of the products that are fundamental to our success and return Nissan to a growth trajectory. As a united team, we are dedicated to working together to ensure the successful implementation of our plans. ”
Nissan Motor Co., Ltd.'s President and CEO Makoto Uchida will take a 50% cut in his monthly salary to help the company meet its financial goals. (Kiyoshi Ota/Bloomberg via Getty Images)
Nissan recorded declines in all categories in the first half of 2024 compared to the same period in 2023. Categories include net sales, operating income, operating profit margin, ordinary income, and net income. Global sales also decreased year on year to 1.6 million units.
“In addition to increased manufacturing costs, increased selling expenses and inventory optimization efforts, particularly in the U.S., impacted profitability,” the company said.
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In addition to promoting the introduction of new energy vehicles in China and plug-in hybrids and e-POWER in the United States, the company announced plans to shorten vehicle development lead time to 30 months.
Nissan's ultimate goal is to “build a leaner, more resilient business that can quickly adapt to market changes.”
The Nissan Leaf is one of the company's two electric vehicles. (Brian Mitchell/Getty Images)
The company will also leverage and deepen its collaboration with Groupe Renault, Mitsubishi Motors and Honda, and will “explore more strategic partnerships in the areas of technology and software services.”
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Nissan also said a chief performance officer responsible for sales and profits has been appointed and is expected to take up the role by December 1.
