AutoBeta(AutoBeta.net)05/13 Report--

Nissan plans to push ahead with its restructuring and cut annual costs of about 300 billion yen (19.9 billion yuan), according to Reuters, citing people familiar with the matter. Affected by the COVID-19 epidemic, the decline in Nissan's sales and profits is intensifying.

Nissan plans to streamline research and development in countries such as India, Vietnam and Thailand, according to people familiar with the matter. Datsan, an entry-level brand for developing countries such as India, will be phased out as Nissan focuses on major markets such as China, Japan and the US.

In July, Nissan will cut 12500 jobs and cut 10 per cent of its capacity and product lines at factories around the world, from the UK to Spain, Mexico, India and Indonesia. In March, Nissan announced its official withdrawal from the Indonesian market, mainly due to continued sluggish local sales demand. The company has two factories in Indonesia with an annual production capacity of about 250000 vehicles and mainly produces the low-end brand Datsan.

Cutting the Dartsong brand is part of Nissan's cost-cutting plan, mainly to improve Nissan's profitability. Of course, this is not only a cost-saving plan, but also a rationalization of operations, a redefinition and a focus on building operations. The plan aims to reverse the overexpansion of former CEO Carlos Ghosn. When Ghosn was at the helm of Nissan, he adopted price-for-volume strategies such as sharp discounts to expand Nissan's sales and market, damaging the value of the brand and making the Nissan brand cheap.

Since 2017, Nissan has been in a difficult situation both internally and externally. in addition to the outbreak of the Ghosn incident, Nissan has also experienced a series of negative events such as declining sales and the shelving of the alliance process. coupled with the interference of the epidemic, Nissan, which is already in trouble, issued a warning last month that it would suffer an operating loss in the fiscal year ending March 2021. The decline in sales accelerated due to the COVID-19 epidemic. An operating loss of up to 45 billion yen ($420 million) is expected for the current fiscal year, and a net loss of 95 billion yen is expected for the current fiscal year, compared with an expected operating profit of 85 billion yen and a net profit of 65 billion yen.

In an effort to save Nissan's flagging performance, Mr. Uchida was appointed as Nissan's CEO in the face of crisis. Subsequently, Uchida issued a "military writ" at the shareholders' meeting, saying that if he could not reverse the decline of Nissan, he would be willing to accept the outcome of being fired. From all the signs at present, Uchida is approaching the end step by step. Nissan's shares have fallen more than 40% since 2020, surpassing Toyota and Honda, with declining sales and performance.

China is the only country with a rapid recovery among the three major auto markets in the United States, Japan and China. As a result of the epidemic, China's automobile production and sales stagnated and recovered quickly in a short period of time. Nissan's sales in China rose 1.1 per cent to 122846 vehicles in April and fell 29.2 per cent to 329397 vehicles from January to April, according to data released by Nissan China.

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