ALBAWABA - Following the announcement of a significant quarterly loss and an 85% drop in operating profits, CEO Makoto Uchida recently unveiled a comprehensive turnaround plan to stabilize the company's operations as Nissan Motor enters a critical phase of restructuring caused by financial pressures and a challenging global market environment.
In order to address these challenges, Nissan intends to lower its manufacturing capacity by 20%, eliminate 9,000 jobs, and sell a portion of its stake in Mitsubishi Motors in order to generate around $483 million, as Electrek reports.
Uchida, who took over as CEO after Carlos Ghosn, the previous CEO resigned, has pledged to make significant revisions, one of which is to reduce his personal compensation by 50%. His emphasis being on the fact that Nissan's earlier growth expectations were unachievable in light of the quick developments in the market.
The carmaker is now putting a higher priority on cost reduction and streamlined operations in an effort to save $3 billion, partially by reducing variable expenses by 100 billion yen and fixed costs by 300 billion yen, according to Fox Business.
Important steps include cutting general costs, modifying output, and concentrating funds on important initiatives, such as EV technology.
Nissan plans to reassess its lineup for a better market fit while postponing some of its planned car releases in order to improve its market position as Nissan's electric vehicles, notably the Ariya and Leaf, have had difficulty gaining popularity, especially in the United States.
Nissan will also depend on its alliance with Renault and Mitsubishi, where an investment of $5.2 billion in electric vehicle and battery technology is already underway, in a sign of Nissan's renewed commitment to expanding its electric vehicle offerings.
Nissan's stock has fallen more than 10% amid these operational changes, hitting a level not observed since 2020, according to CNBC. In order to save money for strategic goals, Nissan halted its interim and year-end payouts and lowered its full-year revenue projection from 14 trillion yen to 12.7 trillion yen, coinciding with the decline in share price.
