Nissan shares slump after it announces 9,000 job cuts and a plan to slash production
Nissan Motor shares slumped 6% in Tokyo trade Friday, a day after the Japanese automaker said it would cut 9,000 jobs and a fifth of its manufacturing capacity as it struggles with sales in China and the United States.
On Thursday, Japan's third-biggest automaker slashed its forecast for full-year operating profit by 70%. It said restructuring would cut costs by 400 billion yen ($2.61 billion) in the financial year to the end of March.
Like many global automakers, Nissan is struggling in China where BYD and other domestic rivals are winning market share with affordable electric vehicles and gasoline-electric hybrids equipped with advanced software.
Nissan is also challenged in the US where it lacks a line-up of hybrids just as that vehicle type is in strong demand.
CEO Makoto Uchida said Thursday that Nissan had not foreseen hybrids' sudden popularity in the US and that demand for revamped versions of core models had not been as strong as hoped.
Nissan's restructuring is the latest chapter in a long-running attempt to revitalize its business, as it has never fully recovered from the 2018 ousting of former Chairman Carlos Ghosn and the scaling back of its partnership with Renault.
People pose and take photos with the new Mona M03 electric vehicle by Chinese EV manufacturer XPeng, during its launch in Beijing on August 27, 2024.
Pedro Pardo/AFP/Getty Images
Related article
The ‘glory days' for global automakers in China are over
On Friday, Japan's Minister of Economy, Trade and Industry Yoji Muto declined to comment to reporters when asked his views on potential government support for Nissan.
Tokai Tokyo Intelligence Laboratory analyst Seiji Sugiura placed much of the blame for Nissan's US hybrid situation on management, which he said was mainly pinning hope on selling new EVs and traditionally powered models.
"The company released its mid-term plan this spring, but in the end there was no meaning to that. I think their understanding of the situation is completely wrong," Sugiura said.
Nissan's mid-term plan announced in March involved 30 new models over the next three years, raising global sales by 1 million vehicles, and total shareholder returns of more than 30%.
