AutoBeta(AutoBeta.net)07/24 Report--

In the current depressed environment of the automobile market, the control of cost output has become a problem that automobile companies in various countries need to face, especially for the car companies whose sales are not optimistic at present, they should start to solve them as soon as possible.

On July 24, Nissan plans to cut more than 10,000 jobs worldwide, including early retirement, in an effort to adjust its production system to revive performance. It aims to boost earnings by cutting fixed spending, a sharp increase from the 4800 job cuts announced in May. Nissan is expected to announce the above news when it publishes its results for the first quarter of fiscal year 2019 on the 25th.

Since the arrest of Ghosn, the former chairman of Nissan, in November 2018, Nissan has followed Ghosn's aggressive expansion route of cutting prices to gain market share. However, after years of price-for-volume, Nissan's sales in the US market have declined and its brand image has depreciated. Nissan's net profit hit a nine-year low in fiscal 2018 because of weak sales in the United States.

For the 2018 fiscal year ended March 31, Nissan's operating profit fell 45% from the previous fiscal year to 318.2 billion yen, while net profit fell 57% to 319.1 billion yen. Operating margin will reach 2.1%. In addition, Nissan's global car sales fell 4.4 per cent to 5.52 million in fiscal 2018, including 9.3 per cent to 1.44 million in the US and 14.9 per cent to 643000 in Europe. Nissan's net profit hit a nine-year low in fiscal 2018 because of weak sales in the United States.

The job cuts also show the pressure on Nissan's current chief executive Hirohito Nishikawa. Although Hiroshi Nishikawa maintained his CEO position in the vote at the annual general meeting in June, he was criticized by several of Japan's top agent consulting firms, who were thought to have been trained by Ghosn and should no longer hold the position.

In addition, in addition to the performance pressure, Nishikawa people must also repair the trust between Nissan and Renault. It is understood that Renault owns 43% of Nissan, while Nissan holds 15% of Renault's non-voting shares. The Renault-Nissan-Mitsubishi alliance has been strained since Ghosn's arrest. And, according to foreign media, Renault has been seeking more control within Nissan, and the situation has deteriorated in the past few months, but will reverse the trend in the next few years.

At the time, Nissan announced that it planned to cut its sales target to 14.5 trillion yen from 16.5 trillion yen in fiscal year 2022, and to 6 per cent of sales as a share of operating profit, which reflects the profitability of its main business.

Nissan will release its quarterly results on Thursday. Some analysts believe that some factories in less profitable areas such as South America may become the hardest hit areas for layoffs, and although continuous layoffs can reduce costs, they will also lead to reduced production, so these car companies may continue to be depressed for some time to come.

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