Nissan Motor Co. is facing significant financial difficulties. It reported a 90% decline in profits compared to the previous year. In response, the company plans to eliminate 9,000 jobs worldwide, approximately 6% of its global workforce, and reduce its manufacturing capacity by 20%.
The automaker attributes its financial downturn to several factors:
Aging Vehicle Lineup: Nissan’s current models have not kept pace with consumer preferences, leading to decreased sales.
Transition to Hybrid and Electric Vehicles: The shift toward EV has intensified competition, particularly from manufacturers with a strong lineup of hybrid and electric vehicles.
Intensified Global Competition: In key markets like China and the U.S., Nissan faces strong competition from traditional automakers and emerging electric vehicle companies, resulting in a reduced market share.
To address these issues, Nissan’s CEO, Makoto Uchida, has announced a 50% reduction in his salary and is implementing a comprehensive restructuring plan to restore profitability.
The planned job cuts are expected to impact regions, including the United States and China, where sales have significantly declined. This move raises concerns about the economic well-being of affected employees and their communities, especially during the holiday season.
Nissan has also agreed to merge with Honda. The two automakers announced in a memorandum of understanding that they will continue exploring integration through a joint holding company, USA Today reports.
They could form the world’s third-largest automotive group if the integration moves forward. Meanwhile, Mitsubishi Motors, in which Nissan holds a 24% stake, is expected to decide whether to join the potential merger by the end of January.
Read more here:
Nissan to Cut Jobs: https://www.nytimes.com/2024/11/07/business/nissan-job-cuts.html
Nissan to Merge with Honda: https://www.usatoday.com/story/money/cars/2024/12/23/nissan-honda-merger/77168615007/
