Nissan bares FY 2019 results, 4-year plan

MANILA: In a YouTube-streamed press conference last week, Japan-headquartered Nissan Motor Co., Ltd reported last year’s financial results, along with a “transformational plan… to achieve sustainable growth, financial stability and profitability” by the end FY 2023.

Nissan President and CEO Makoto Uchida said that amid the COVID-19 crisis, the company’s 2019 sales “decreased 10.6% to 4.93 million units given the significant slowdown in TIV (total industry volume) in the fourth quarter, as well as the decrease in sales primarily in North America and Europe in the first three quarters.” Despite the decline, Nissan kept a 5.8% global market share.

However, Nissan last year saw a significant operating loss of 40.5 billion yen, along with a net loss of 671.2 billion yen – reflecting the decrease in sales. “Net loss also includes costs associated with restructuring and impairments of 603.0 billion yen, as we focus on restructuring measures to improve the company’s profitability,” continued Uchida, who lamented that the pandemic “has deeply impacted financial activities” including those of the automotive industry. He further admitted that “Nissan also has its own issues that have combined with these external factors and worsened (its) financial results.”

Uchida declared, “For Nissan to overcome this situation, we must admit our mistakes and correct course. We must resolve the issue of redundant assets from which we do not expect sufficient returns… We must therefore prioritize and focus by allocating resources to core markets and core segments. These are very difficult decisions. But these steps need to be taken decisively and without compromise.”

The company will be more prudently eye “steady growth” while scaling back on its aspirations of “excessive sales.” Nissan is shuttering its manufacturing facilities in Indonesia and Barcelona, and leverage its Thailand plant as a main production hub for the region. Underscored company COO Ashwani Gupta, “As far as Nissan is concerned, we are going to use (the) Thailand plant for Asia, ASEAN, (and) for exports (to) other parts of the world.”

The company will also pare its total vehicle models from 69 to less than 55 — a reduction expected to yield enhanced competitiveness. “By the end of fiscal year 2023, we will discontinue older cars and trucks as well as models unique to a single region, (along with) withdrawing the Datsun brand in Russia.” Part of the company’s rationalization moves are “rightsizing” production capacity by 20% to 5.4 million vehicles per year and slashing fixed costs by 300 billion yen. It will leverage its membership in the alliance with Renault and Mitsubishi to share resources. Nissan will focus on what it calls “global core model segments, including enhanced C- and D-segment vehicles,” according to a release.

Significantly, part of the “Nissan Next” vision may be the rolling out of a Nissan vehicle from a Mitsubishi production line here – part of the leveraging of partnerships in the region in view of rationalization goals.

“Asia is a great market for us in terms of customers… products (and) partners which we have in this region. However, when we look at our capability and capacity to cater to the demand of this region, we do believe that we need a partner who is much stronger than (here),” revealed Gupta. “Our second biggest market in ASEAN is the Philippines where we enjoy great market share on the frame-based SUV and frame-based pickup.”

He revealed, “We don’t have a plant today, and we are now studying with Mitsubishi to utilize (its) plant in (the) Philippines so that we can localize our great products in the Philippines.”

Uchida also shared the company’s move to prioritize core markets Japan, China, and North America. Despite the consolidation moves, the Nissan plans to “introduce 12 models in the next 18 months,” and grow its portfolio of electric vehicles and electric motor-driven cars… with “more than one million electrified sales units expected a year by (the) end of FY 2023.”

Photos screen-grabbed from Nissan press conference, and from Nissan

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