AutoBeta(AutoBeta.net)03/10 Report--

According to sales data released by Nissan China, sales in China in February 2020 were 15111 vehicles, down 80.3% year-on-year.

Citibank said Nissan's sales in China fell sharply as a result of the new crown pneumonia epidemic, coupled with the inability of Nissan's four factories in China to produce normally. If the four factories fail to produce normally within two months, Nissan's net profit for fiscal year 2020-2021 is forecast to fall by 35 per cent, which will lead to more severe financial pressure on the Renault Nissan Mitsubishi Alliance.

It is understood that Nissan has four factories in China, one of which is located in Xiangyang City, Hubei Province, which has been closed since the outbreak of Xinguan pneumonia. In addition, Nissan's factories in Japan were unable to produce normally because the Japanese automaker supplied nearly 800 auto parts from Hubei Province.

Affected by a shortage of parts supply, Nissan closed some production lines in Kyushu, southwestern Japan, on February 14 and 17, and suspended production again on February 24. In addition, Nissan's factories in Malaysia, the United States, Britain, India, Mexico, Russia and Spain were also forced to stop production. Nissan CEO Makoto Uchida said the outbreak would continue to affect Nissan's future business plans, making it difficult for Nissan to achieve a significant performance recovery by 2020.

Nissan's current performance has bottomed out, with the last quarter its first quarterly loss since March 2009. In the first three quarters of fiscal year 2019, Nissan's total revenue was 7507.3 billion yen, down 12.5% year-on-year; operating profit was 54.3 billion yen, down 82.7% year-on-year; net profit was 39.3 billion yen (about 2.479 billion yuan), down 87.6% year-on-year.

In order to save Nissan from crisis, Uchida held his first shareholders 'meeting on February 18, saying that "if Nissan's decline cannot be reversed, he is willing to accept the fate of being fired." It has promised a more detailed medium-term business restructuring plan by may--a plan to help the company recover from falling profits and restructuring. Uchida must prove to the company that he can alleviate Nissan's many operational problems and promote and repair increasingly strained relations between alliances.

Earlier, Nissan had announced that it would lay off 12,500 jobs worldwide by March 31,2023 and planned to streamline its product line, involving 60 models under the three brands of Infiniti, Nissan and Datsan.

Analysts said Nissan's decline in sales in China could lead Reynolds-Nissan Mitsubishi, the world's third-largest automaker, to expand layoffs, plant closures and layoffs, and sell some assets to ease cash pressures and revive alliances.

The other two alliance companies are also suffering because of Nissan's deteriorating performance. Renault Group's operating income in 2019 was 55.54 billion euros, down 3.3% year-on-year; net profit was 19 million euros, net profit lost 141 million euros (about 153 million US dollars) compared with last year, the first annual loss in 10 years. Renault Group announced a significant cut in its dividend for 2019 and also lowered its operating margin target for 2020.

Mitsubishi Motors posted a net loss of 14.4 billion yen (921 million yuan) and a loss of 6.6 billion yen (422 million yuan) in operating income for the third quarter (October-December), its worst quarterly results since 2016.

In order to improve performance and strengthen alliance relationship, Nissan reached a brand-new framework agreement with Renault and Mitsubishi in early February to further strengthen business model and organizational structure, and will take measures to promote resource sharing and help the three companies achieve effective improvement of competitiveness and performance. The medium-term strategic plans of the three member companies will be announced at the same time in May 2020. With only two months left to develop the strategy, its success will depend on Nissan Renault's ability to end the tensions in alliance relations caused by Ghosn's ouster.

Relations between the Reynolds-Nissan-Mitsubishi alliance have become particularly tense since Mr. Gohn's arrest, and the loosening of relations between the alliance companies is likely to hinder development in the current market downturn and epidemic outbreak. "We are struggling and our partners are struggling, but I believe we can strengthen our alliance," Uchida said."This is what I want to do and what I promise to do." Renault chairman Jean-Dominique Senard said: "We are now in a special period and the challenges facing the alliance are really serious."

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