The four-year transformation plan includes scalability of entire global operations to focus on profitability and reduce excesses
Nissan Motor Co. Ltd announced an operating loss of 40.5 billion yen from 318.2 in 2018 and a net loss of 671.2 billion yen in the fiscal year 2019. Nissan is suffering business disruptions due to the COVID-19 pandemic all over its global operations. The company has just laid out its next four-year plan to re-strategize and streamline redundant operations to aim at a six percent market share by FY 2023. Crucial steps will include a reduction in production capacity and facility closures as well. Makoto Uchida, CEO, Nissan, mentioned that focus of the company will be shifting towards improving the quality of the business and avoiding unnecessary overheads.
Restructuring Production and Models
Nissan has decided to reduce 20 percent capacity to 5.4 million units per year. The plant in Indonesia will be shut and Thailand will be the only production base for the entire ASEAN market. Also, Nissan is considering closing down the 40-year-old Barcelona plant as well. Protests have ignited at the Barcelona facility as this decision will cause a loss of 2,800 jobs in Spain. Sunderland will become the main production base for Europe. For the American plants, optimizations will be made to product lines to achieve 80 percent production utilization ratios.
The number of models will be trimmed from 69 to about 55, which is again a 20 percent reduction. Nissan will now be paying attention to models that are competitive in specific markets and avoid the ones which do not sell much. Product development life-cycle will be shortened to just 3 years from nearly 6 years. Nissan will focus on C, D, EV, and Sports platforms, and increase alliance utilization.
Nissan has clearly mentioned that Japan, China, and North America are its core markets, and all focus will be realigned to sustainable growth. The business will be continued in Europe, Latin America, and ASEAN markets but within the umbrella of the alliance activities. Japan market will see a new model launches every year, with more attention to electric vehicles. Nissan is proud of its autonomous technology and will build upon this asset further. Both e-Power and ProPILOT technologies have been well received by the target audience.
In China, Nissan already has a strong brand presence and will keep building on it. Further attention will shift to connected technologies and EVs. The company aims at 6 million units to be under the connected domain by FY2023. The fleet business is a strong shoulder for Nissan America, but now the brand has decided to look at retails sales to drive profits. Sedan platforms to take a back step shifting attention to SUVs and Pick-up platforms. Europe will see more electrified models through the e-power campaign. Crossover SUV segment will get all the attention now, and that too via Alliance assets.
Nissan will be producing 12 new models in the coming 18 months. Nissan Kicks will be shifting to e-Power for Japan market as the platform has been well received in all markets. Further, 8 new pure-electric models will be introduced by 2023. The product electrification ratio as defined by Nissan is 60 percent in Japan, 23 percent in China, and 50 percent in Europe by FY2023. The ProPILOT autonomous tech will enter 20 models across 20 markets. Nissan has noted Alliance assets to get more focus now for many markets.