Turning the Tide: How Nissan is Tackling its recent challenges

#1 Financial Challenges

Nissan in FY 2024 Q2 financial results declared $60 million losses, however a year ago Nissan reported net income of $1.2 billion in FY 2023. Nissan is considering drastic cost cutting measurers to improve the financial performance and rebalance in the market. On the other side Nissan is also reducing its share holding in Mitsubishi motors by 10%. This might gave some relief to Nissan.

#2 Restructuring and Job Cuts

As a part of any company to improve its financial performance Job cuts due to internal restructure is inevitable. Nissan also announced job cuts for 9,000 workers globally which is around 6% of its total head count. This will result in slashing the production capacity of Nissan facilities by 20% to align with the current demand in the market. This all in response to the demand for EV's and producing better cars. Like any other global car manufacturing brand, Nissan also faced double digit decline in sales in China. We have also observed the same situation with German Car manufacturers.

#3 Collaboration with Honda

Nissan and Honda recently confirmed the collaboration to develop vehicle technology. However both denied the rumours about the merger and acquistion. Honda and Toyota are currently one of the few car manufacturers focused on the Hybrid road map and yes they are doing fantastic. This would be a better opportunity for Nissan to join the forces and use shared platforms as Toyota and Suzuki are doing currently. The collaboration of Nissan and Toyota will be focused on EV technology and software development to gain production efficiencies and develop better products to stay relevant in the competition.

#4 Management Changes

Taking the responsibility of the losses, the current CEO of Nissan Mr. Makoto Uchida has accepted the pay cut by 50%, same changes are accepted by others in the leardership team. This is also a bold move and I strongly belive this is reflection of Japanese culture to sacrifice something for their job. This reflects the leadership style of leading by example.

In summary Nissan is currently operating under an "Emergeny Mode" to turn around the fortune. The key measures like job cuts, changes in the management, collaboration with Honda, selling Mitsubishi shares will give a turn around to Nissan in upcoming months. I believe Nissan is like a Phoenix following quote by Janet Fitch will be appropriate "Phoenix must burn to emerge".
Let us know what do you think about Nissan's future in the following comments.

Image Credits: Images are taken from the official Nissan and Honda website.

#5 Reduction in Stake by Renault

Amidst this challenging situation of Nissan, Renault the french car manufacturer holding highest share, has reduced their share from 46% to 40%. As a result of this Nissan will face strong head winds in their further decision making. Back in 1990s Nissan faced similar challenges however collaboration with Renault resulted in a success story.

Summary

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