Nissan CEO Confirms Turnaround on Track Despite Ongoing Financial Losses

Nissan CEO Confirms Turnaround on Track Despite Ongoing Financial Losses

Nissan's chief executive Ivan Espinosa has declared that the automotive giant is firmly on the right path with its extensive restructuring efforts, even as the company continues to report financial losses. Speaking to reporters, Mr. Espinosa emphasized that the firm had to "reset the clock" through its major overhaul, which includes factory closures and substantial job reductions.

Improved Financial Forecasts and Cost Savings

The Japanese car manufacturer has significantly revised its forecasted losses for the 2025 financial year. Nissan now anticipates an operating loss of 60 billion yen, equivalent to approximately £287 million. This marks a substantial improvement from the previous outlook, which projected a loss of 275 billion yen, or about £1.31 billion. The company's third quarter operating profits also fell by 44% to 17.5 billion yen, which is roughly £83.7 million. Despite these figures, Mr. Espinosa highlighted that the results demonstrate tangible progress in the company's recovery journey.

Details of the 'Re:Nissan' Restructuring Program

The comprehensive 'Re:Nissan' program has implemented sweeping changes across the organization. Key elements of the restructuring include:

• Job cuts of up to 20,000 positions by the year 2027.
• The closure of seven factories on a global scale.
• The redeployment of 3,000 employees from future model development to focus on identifying cost-cutting opportunities.

These measures were introduced in response to serious financial challenges faced by the company. Nissan now aims to return to profitability by the conclusion of its 2026 financial year.

Substantial Cost Savings and Workforce Management

Nissan has reported identifying more than £593 million in cost savings through what it describes as "thousands of innovative ideas". In the first half of the current year alone, the company has realized approximately £383 million in savings. During a press conference in Japan, Mr. Espinosa acknowledged that sales remain under pressure and tariffs continue to pose significant issues. However, he sought to reassure stakeholders that the turnaround efforts are yielding positive results.

Mr. Espinosa stated, "From the beginning, we said that this year was a year of restructuring. And when you do a restructuring unfortunately there are costs that are incurred and impairments that are incurred. It's unfortunate that we have a net loss this year but in a way, it's expected. This is what we said we'd do. We had to reset the clock of the company and this is what we're doing with the plan."

He further added, "I think it's remarkable to recognise from the teams the discipline and the dedication that they have put into moving the company from where we were to where we are in the third quarter. We are moving swiftly, with responsibility and taking care of the actions that we have to follow. We are a bit ahead of schedule in terms of the workforce reduction but we're not sharing the breakdown - it's about thoughtfulness and responsibility in the way we're managing these adjustments to the workforce."

Collaboration Talks and Electric Vehicle Focus

Following unsuccessful merger negotiations with Honda, Nissan has rekindled discussions with its rival. Mr. Espinosa clarified that these talks are "focussing on projects that bring win-win to both companies", with a particular emphasis on collaboration in North America. Both automotive manufacturers are confronting headwinds from tariffs under President Trump's administration in that region.

In a significant development for its electric vehicle strategy, Nissan's Sunderland factory has recently commenced production of the third generation Leaf model. This milestone arrives fifteen years after the launch of its first predecessor. The success of the new Leaf could prove pivotal for Nissan, which has invested millions in transitioning to electric vehicle production at the Wearside plant. The facility currently employs about 6,000 people, underscoring its importance to the local economy and the company's future direction.