Nissan reported a $6.2bn net loss for the latest fiscal year and unveiled a plan to turn the carmaker around by eliminating fixed costs, cutting capacity, and reducing the number of vehicle models.
The result, the first loss in a decade and the biggest in 20 years includes restructuring and impairment charges for the year that ended in March, the Yokohama-based company said.
The four-year plan calls for production to be cut by 20% to about 5.4 million vehicles a year, and includes the closing of Nissan’s Barcelona plant in addition to one it is shuttering in Indonesia.
The car maker will cut the number of models to less than 55 from the current 69, with a plan to introduce 12 new vehicles in the next 18 months. The most anticipated new model is the Rogue sport-utility vehicle for the US.
The reorganisation is part of a broader push by Nissan and alliance partners Renault and Mitsubishi to focus on costs and profitability to weather a collapse in car demand due to the coronavirus pandemic. Nissan has been in turmoil since the November 2018 arrest of former chairman Carlos Ghosn, who had pushed for volume growth. This all comes as the industry is being disrupted by the shift to electric vehicles and autonomous driving.
Sales for the fiscal year through March fell 15%. It didn’t issue an earnings outlook for the current period, citing uncertainty over the business because of the pandemic.
Shares of Nissan have slumped 29% this year, out-pacing the declines by Toyota and Honda. Underscoring the challenges facing Nissan, the carmaker said output fell 62% in April as the pandemic continued to pummel the industry.
“I will do everything I can to return Nissan to a growth path,” chief executive Makoto Uchida said.