Nissan Motor Company today in Japan announced weak financial results for the six-months ended 30 September 2024. Net revenue decreased by ¥79.1 billion year-over-year (YOY) to ¥5.98 trillion yen, with consolidated operating profit decreasing ¥303.8 billion to ¥32.9B. This was a paltry operating profit margin of 0.5%. Net income was ¥19.2 billion. Global sales volumes decreased year-on-year to 1.6 million units.#
“Profitability was affected by higher selling expenses and inventory optimization efforts, particularly in the US, along with rising manufacturing or monozukuri costs,” Nissan said in its earnings release.**
As a consequence Nissan revised its full year financial outlook for fiscal year 2024. It also announced a senior leadership appointment effective 1 December 2024. Guillaume Cartier, chairperson, Management Committee for AMIEO (Africa, Middle East, India, Europe and Oceania), will assume an expanded role as chief performance officer (CPO). Cartier will oversee the Japan/ASEAN, AMIEO, and Americas regions, as well as Global Sales and Aftersales. He is responsible for sales and profit.
It’s also selling 149,028,300 shares of Mitsubishi, which will reduce Nissan’s stake in Mitsubishi from 34.07%. . It could be the beginning of the end of alliances within the Renault-Nissan-Mitsubishi Alliance or the complete demise of the Alliance.
“Due to the revised financial forecast for the fiscal year, the board of directors elected not to pay an interim dividend. The previous year-end dividend outlook has been removed and will be determined in conjunction with the recovery of the business,” Nissan said.
Turnaround actions
- Facing a severe situation, Nissan said is taking urgent measures to turnaround its performance and create a leaner, more resilient business capable of swiftly adapting to changes in the market.
- To achieve healthy growth in the future, the company will implement a structure to secure sustainable profitability and cash generation, even with a projected annual sales of 3.5 million units by fiscal year 2026.
- While ensuring diligent execution of the Arc business plan, Nissan seeks to enhance investment efficiencies and product competitiveness through strategic partnerships with Renault Group, Mitsubishi Motors Corporation (MMC), and Honda Motor Co., Ltd.
Stabilize And Right-Size Business
- Nissan aims to reduce fixed costs by ¥300B compared to FY2024, and variable costs by ¥100B (compared to FY2024) while maintaining a healthy free cash flow.
- Nissan will cut global production capacity by 20% and reduce its global workforce by 9000.
- The company is implementing various measures to lower selling, general, and administrative expenses, decrease the cost of goods sold, rationalize its asset portfolio, and prioritize capital expenditures and investments in research and development.
- CEO Makoto Uchida will voluntarily forfeit 50% of his monthly compensation starting in November 2024 and the other executive committee members will also voluntarily take a pay reduction accordingly.
Product Competitiveness And Growth
Nissan will accelerate some of the plans under The Arc (its business plan – Autocrat) to capitalize on market opportunities.
- The company plans to advance the introduction of new energy vehicles in China, and plug-in hybrids and e-POWER in the US, while simultaneously increasing sales per model to enhance model efficiencies.
- Nissan aims to reduce vehicle development lead time to 30 months and deepen collaboration with Renault Group, Mitsubishi Motors Corporation (MMC), and Honda Motor Co., Ltd., while exploring more strategic partnerships in the areas of technology and software services.
- To facilitate swift decision-making for the turnaround actions, Nissan will appoint a Chief Performance Officer responsible for sales and profit, effective December 1.
“These turnaround measures do not imply that the company is shrinking. Nissan will restructure its business to become leaner and more resilient, while also reorganizing management to respond quickly and flexibly to changes in the business environment. We an aim to enhance the competitiveness of our products, which are fundamental to our success, and set Nissan back on a path of growth. As a cohesive team, we are dedicated to working together to ensure the successful implementation of our plans.” Said Nissan President and CEO Makoto Uchida.
*AutoInformed on
**Inevitable Nissan Footnotes
Financial forecasts are based on judgements and estimates made using currently available information. They are subject to uncertainty and risk, and final results may differ.
- #Based on average foreign exchange rates of JPY 150/USD, JPY 164/EUR
- Net income attributable to owners of the parent.
- Since the beginning of fiscal year 2013, Nissan has reported figures calculated under the equity method accounting for its joint venture with Dong Feng in China. Although net income reporting remains unchanged under this accounting method, the equity-accounting income statements no longer include Dong Feng-Nissan’s results in revenue and operating profit.
Nissan Motor Posts Disastrous First Half Results
Nissan Motor Company today in Japan announced weak financial results for the six-months ended 30 September 2024. Net revenue decreased by ¥79.1 billion year-over-year (YOY) to ¥5.98 trillion yen, with consolidated operating profit decreasing ¥303.8 billion to ¥32.9B. This was a paltry operating profit margin of 0.5%. Net income was ¥19.2 billion. Global sales volumes decreased year-on-year to 1.6 million units.#
“Profitability was affected by higher selling expenses and inventory optimization efforts, particularly in the US, along with rising manufacturing or monozukuri costs,” Nissan said in its earnings release.**
As a consequence Nissan revised its full year financial outlook for fiscal year 2024. It also announced a senior leadership appointment effective 1 December 2024. Guillaume Cartier, chairperson, Management Committee for AMIEO (Africa, Middle East, India, Europe and Oceania), will assume an expanded role as chief performance officer (CPO). Cartier will oversee the Japan/ASEAN, AMIEO, and Americas regions, as well as Global Sales and Aftersales. He is responsible for sales and profit.
It’s also selling 149,028,300 shares of Mitsubishi, which will reduce Nissan’s stake in Mitsubishi from 34.07%. . It could be the beginning of the end of alliances within the Renault-Nissan-Mitsubishi Alliance or the complete demise of the Alliance.
“Due to the revised financial forecast for the fiscal year, the board of directors elected not to pay an interim dividend. The previous year-end dividend outlook has been removed and will be determined in conjunction with the recovery of the business,” Nissan said.
Turnaround actions
Stabilize And Right-Size Business
Product Competitiveness And Growth
Nissan will accelerate some of the plans under The Arc (its business plan – Autocrat) to capitalize on market opportunities.
“These turnaround measures do not imply that the company is shrinking. Nissan will restructure its business to become leaner and more resilient, while also reorganizing management to respond quickly and flexibly to changes in the business environment. We an aim to enhance the competitiveness of our products, which are fundamental to our success, and set Nissan back on a path of growth. As a cohesive team, we are dedicated to working together to ensure the successful implementation of our plans.” Said Nissan President and CEO Makoto Uchida.
*AutoInformed on
**Inevitable Nissan Footnotes
Financial forecasts are based on judgements and estimates made using currently available information. They are subject to uncertainty and risk, and final results may differ.