Nissan’s new transformation plan focuses on sustainable growth and profitability

Nissan Motor Co., Ltd. today announced a new four-year plan to lead the Japanese company to sustainable growth, financial stability and profitability by the end of the 2023 fiscal year. This scalable plan aims at cost rationalization and business optimization and shifts the company’s strategy away from its previous focus on excessive expansion.

Part of the new Nissan four-year plan includes decisive measures to transform the business by rationalizing unprofitable operations and redundant locations, as well as through structural reforms. The company will also reduce fixed costs by streamlining its production capacity, global product offering and spending. Through disciplined management, Nissan will set priorities and invest in businesses that are expected to have solid recovery and sustainable growth.

By implementing the plan, Nissan aims to achieve a 5 percent profit margin and a sustainable global market share of 6 percent by the end of 2023. This includes the pro rata contributions from its 50 percent joint venture in China.

Nissan CEO Makoto Uchida says: “Our transformation plan is aimed at steady growth rather than excessive sales growth. We will focus on our core competencies and the quality of our business while maintaining financial discipline and focusing on unit sales to achieve profitability. This coincides with the restoration of a culture defined by ‘Nissan-ness’ for a new era.”

The four-year plan is based on two strategic areas that build on Nissan’s core competencies: innovation, master craftsmanship, customer focus and quality, as well as continuous cultural change:

1) Rationalization: robust measures for restructuring, reducing costs and increasing efficiency

Overview of key actions:

  • Nissan overcapacity cut 20 percent to 5.4 million units per year assuming standard shift operations.
  • A goal of plant utilization of more than 80 percent per location to increase profitability.
  • Streamline global product line-up by 20 percent (from 69 to less than 55 models).
  • Fixed cost reduction of about 300 billion yen (about 2.5 billion euros).
  • Intent to close the Barcelona plant.
  • Consolidation of North American production around core models.
  • Plant closure in Indonesia and concentration of activities in the plant in Thailand as the only production base in the ASEAN countries.
  • Resource sharing between alliance partners, including production, models and technologies.

2) Prioritization of core markets and core products

Overview of key actions:

  • Nissan’s core activities focus on the markets of Japan, China and North America.
  • Improved use of Alliance assets to secure Nissan operations in South America, ASEAN and Europe at an appropriate level.
  • Complete withdrawal from South Korea, cessation of sales of the Datsun brand in Russia and streamlining of business in some ASEAN markets.
  • Focus on core segments worldwide, including models in the C and D segments, electric vehicles and sports cars.
  • 12 new models will be launched in the next 18 months.
  • Expansion of EV activities including vehicles with electrified drives (including e-POWER) with an expected annual sales volume of more than one million units by the end of the financial year 2023.
  • In Japan, two more electric vehicles and four other e-POWER models are launched, which increases the degree of electrification to 60 percent of sales.
  • Introduction of the advanced driver assistance system ProPILOT in more than 20 models in 20 markets with the aim of equipping more than 1.5 million units per year with this system by the end of the 2023 financial year.

“Nissan must add value to customers around the world,” concludes Uchida. “We can only do that if we make a breakthrough in the products, technologies, and markets that we are competitive in. That’s DNA of In this era, the company remains focused on people to enable technology for everyone and continue to face challenges as only Nissan can.”

Author: Nabeel K

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