Nissan Motor Co. vowed to close seven factories and cut 20,000 jobs after posting its biggest annual loss since French carmaker Renault SA rescued the company from near bankruptcy a quarter century ago.
The company decided against issuing an operating profit forecast for the fiscal year ending March 2026. The carmaker reported a net loss of ¥670.9 billion ($4.5 billion) in the year that ended in March.
Nissan is also accelerating its restructuring. The carmaker will close the seven manufacturing facilities by the 2027 fiscal year, with annual production capacity set to fall to 2.5 million units from 3.5 million last year.
It also confirmed it will cut 20,000 jobs, which includes the loss of 9,000 roles it announced previously. The measures are aimed at cutting costs by ¥500 billion, it said.
The ailing Japanese carmaker has struggled to turnaround its business as its aging lineup failed to win over consumers in the US and China. It’s already announced plans to cut thousands of jobs, slash production capacity and replaced most of its top executives — including appointing a new chief executive officer — after efforts to combine with Honda Motor Co. fell apart earlier this year, leaving it in urgent need of another lifeline.
“Reality is clear,” CEO Ivan Espinosa said in his first post-earnings briefing since taking the top job in April. “Nissan must prioritize self-improvement with greater urgency and speed.”
The sweeping changes signal a major departure from previous CEO Makoto Uchida, who was criticized for not being aggressive enough with his plan to cut 9,000 jobs and reduce production by 20 per cent. Nissan had indicated broader plans to cut output, announcing last week that it was abandoning plans to build a battery plant in Fukuoka in order to focus on its own recovery.
Even with deepening cuts, Nissan faces an uphill battle in finding a savior with the collapse of tie-up talks with Honda complicating its search.
Hon Hai Precision Industry Co. had emerged as a front-runner, with Chairman Young Liu saying in February his company had approached Nissan and Honda about potential cooperation when the two were involved in talks to combine. The Taiwanese iPhone maker known as Foxconn has been clear about its desire to assemble electric vehicles for Japanese automakers and earlier this month signed an agreement with Mitsubishi Motors Corp. to do just that.
Meanwhile, Nissan’s restructuring efforts risk being derailed by US tariffs on imported cars and auto parts. The carmaker said it expects to see a ¥450 billion impact from policies, which is included in its forecast for a ¥200 billion operating loss in the first quarter.
Exports from Mexico and Japan account for almost 45% of Nissan’s sales in the US, Chief Financial Officer Jeremie Papin said. Duties will affect 300,000 units in exports from Mexico, and 120,000 units from Japan, he said.
Trump’s ever-changing trade policies are already rippling through the global auto sector with some manufacturers like Stellantis NV and Mercedes-Benz Group AG pulling their earnings forecasts and others warning of substantial hits to the bottom line. General Motors Co. slashed its profit outlook due to as much as $5 billion of exposure to auto tariffs, while Ford Motor Co. expects a $1.5 billion hit to results.
Japan’s top carmakers have joined the chorus sounding the alarm over the implications of Trump’s ever-changing trade policies. Toyota Motor Corp. said it estimates a ¥180 billion hit to operating income over just two months and Mazda Motor Co. withheld annual guidance while warning of a ¥10 billion impact just for the month of April.
Separately, Renault, which has a roughly 36% stake in Nissan, said it expects to see a €2.2 billion ($2.4 billion) hit to its first-quarter net income due to the Japanese carmaker’s turnaround efforts.
Espinosa said Nissan is looking to enhance its partnership with Renault in Europe, India and Latin America, and work with Mitsubishi in the US on the development of pickup trucks and electric-vehicle batteries. It may also look to work with Honda for the US, he said.
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Published on May 13, 2025
