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Nissan has seen a sharp drop in sales profits since it was affected by the former CEO Ghosn incident, and Nissan is hoping to achieve a continued decline in profits by cutting costs. Nissan is reducing costs through layoffs, plant closures and capacity cuts, leading to a sharp decline in the global market, Reuters reported, citing people familiar with the matter.

According to people familiar with the matter, an earlier plan under Mr Ghosn is to boost sales by expanding models around the world, including expanding the product line to 73 by the end of 2022. It has been sold to multiple markets, including India, Russia, South Africa and Southeast Asia, while investing heavily in promotion and marketing to meet sales targets.

But now, instead of improving, there has been a decline in sales in several regions, including a 10 per cent year-on-year decline in Nissan sales in North America and a continued downturn in the Chinese market, resulting in a 1.1 per cent decline in Nissan sales compared with the previous year. The increase in car sales has not reached the scheduled sales volume, so that the company's production capacity is only 60%, and 40% of the production capacity is still unused or underutilized.

To this end, Nissan is planning to reduce operating costs by at least 480 billion yen ($4.4 billion) by 2023, which will cut at least 4300 jobs and close two workers, according to people familiar with the matter. at the same time, it plans to cut a number of models whose sales do not meet profit targets, and plans to reduce the number of models to 62. In addition to cutting models, the launch of new models will also accelerate and increase average sales per production line to 87000, with Nissan selling 69 models in 2018.

It is reported that the plan was submitted to Nissan's board of directors in November last year and was generally approved by the board of directors. A person close to Nissan's executive and board said of the current Nissan: "the situation is very serious. Do it or die. "

It can be seen that the current situation of Nissan is indeed very grim. According to the data previously released by Nissan, the cumulative global sales of Nissan in the first quarter of fiscal 2019 (March-June) was 1.23 million vehicles, down 6.0% from the same period last year; the net profit was only 6.4 billion yen, down 94.5% from the same period last year. Global sales in the second quarter (July-October) were 1.27 million, down 7.5 per cent from a year earlier, while operating profit was 30 billion yen ($275 million), a sharp drop of 70 per cent from 101.2 billion yen a year earlier. To this end, Nissan cut its full-year operating profit forecast for fiscal 2019 by 35%, and Nissan's performance has been miserable in the past 11 years.

According to the deterioration of the situation, it may prove the "cruel words" released by former Nissan CEO Ghosn a few days ago. Ghosn, who was detained by the Japanese government, fled to Japan illegally around Christmas at the end of last year, and in a conversation that lasted more than 10 hours before fleeing Japan, Ghosn told his Japanese defense lawyer that Nissan would go bankrupt within two to three years. But Ghosn's defense lawyer Nobuhiro Nakahara said Ghosn did not say what made him think Nissan would be in trouble.

Ghosn, a former Nissan CEO, did help Nissan return to profitability in an environment that was on the verge of bankruptcy, and fulfilled the Renault-Nissan-Mitsubishi alliance plan to maintain stable performance, but Nissan sales have continued to decline since Ghosn's arrest.

There is no denying that Ghosn knows a lot about the development of Nissan and what is more suitable for Nissan, including a more aggressive management approach in the face of a downturn in the global car market, but after Ghosn's arrest, no one knows the purpose of his plans for the next few years. So much so that, as the source mentioned above, Nissan is now burdened with too much burden. "instead of achieving Ghosn's highly aggressive and rapidly expanding production target, we chose to reduce costs."

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