Nissan to set out survival plan after expected annual loss

By Naomi Tajitsu TOKYO (Reuters) - Nissan Motor Co will unveil its plan to become a smaller, more cost-efficient automaker on Thursday as it looks to recover from four years of tumbling profits which are set to culminate in its first annual operating loss in 11 years. The Japanese carmaker's second recovery plan in less than a year will outline how it will slash fixed costs, streamline its products and shore up cash as it reels from a plunge in sales as the coronavirus pandemic hits demand for cars. Nissan said in April that it expected to post an annual operating loss of up to 45 billion yen (340.3 million pounds) when it announces its results for the year to March 31 at 0800GMT on Thursday, which would be its worst performance since 2008/09.

Reuters May 28, 2020 06:06:08 IST
Nissan to set out survival plan after expected annual loss

Nissan to set out survival plan after expected annual loss

By Naomi Tajitsu

TOKYO (Reuters) - Nissan Motor Co <7201.T> will unveil its plan to become a smaller, more cost-efficient automaker on Thursday as it looks to recover from four years of tumbling profits which are set to culminate in its first annual operating loss in 11 years.

The Japanese carmaker's second recovery plan in less than a year will outline how it will slash fixed costs, streamline its products and shore up cash as it reels from a plunge in sales as the coronavirus pandemic hits demand for cars.

Nissan said in April that it expected to post an annual operating loss of up to 45 billion yen (340.3 million pounds) when it announces its results for the year to March 31 at 0800GMT on Thursday, which would be its worst performance since 2008/09.

The automaker sold 4.8 million vehicles in its latest financial year, the second decline in a row and a fall of 13% from last year, knocking it off its perch as Japan's second biggest automaker to trail Toyota <7203.T> and Honda <7267.T>.

The plan will follow a new strategy announced by Nissan and its partners Renault SA and Mitsubishi Motors Corp <7211.T> on Wednesday to work more closely on developing and producing cars to reduce costs and ensure the group's survival.

Even before the spread of the coronavirus , Nissan's sales and profits had been slumping, forcing it to row back on an aggressive expansion plan pursued by ousted leader Carlos Ghosn.

The pandemic has only piled on the urgency and pressure to renew its efforts to downsize.

Nissan's operating profit has tumbled for four consecutive years as its pursuit of market share, particularly in the United States, led to overcapacity at its car plants, steep discounting and a cheapened brand.

The three-year strategy will lay out a path to sustainable profitability and is the vision of Chief Executive Makoto Uchida and Chief Operating Officer Ashwani Gupta, who took over after months of internal turmoil following Ghosn's arrest in 2018.

Under the plan, Nissan will curb its ambitions for sales growth to target annual sales of about 5 million units, Reuters reported in April, a cut from a previous goal of 6 million cars outlined in July by then-CEO Hiroto Saikawa.

Another top priority will be the preservation of cash. As of December, Nissan's automotive operations had negative free cash flow of 670.9 billion yen, a more than six-fold increase from a year ago.

(Reporting by Naomi Tajitsu; Editing by David Clarke)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

Estee Lauder sales hit by lackluster demand for makeup, shares drop
Business

Estee Lauder sales hit by lackluster demand for makeup, shares drop

By Aditi Sebastian (Reuters) - Estee Lauder Cos Inc missed analysts' estimates for quarterly sales on Monday, as weak demand for its luxury foundations and lipsticks offset growth at the cosmetics maker's skincare brands, with people continuing to work from home. The company's shares, which touched a record high last week, fell nearly 7%. Sales of cosmetics and makeup products have taken a hit during the COVID-19 pandemic as shoppers stay at home, pressuring Estee Lauder's M.A.C and Bobbi Brown brands

Supply constraints slow U.S. factory activity in April
Business

Supply constraints slow U.S. factory activity in April

By Lucia Mutikani WASHINGTON (Reuters) - U.S. manufacturing activity grew at a slower pace in April, restrained by shortages of inputs as rising vaccinations against COVID-19 and massive fiscal stimulus unleashed pent-up demand. The survey from the Institute for Supply Management (ISM) on Monday showed record-long lead times, wide-scale shortages of critical basic materials, rising commodities prices and difficulties in transporting products across industries

Oil rises over 1% as demand hopes bolster sentiment
Business

Oil rises over 1% as demand hopes bolster sentiment

By Stephanie Kelly NEW YORK (Reuters) - Oil rose more than 1% on Monday as Chinese economic figures and U.S. vaccination rate pointed to a strong rebound in demand in the world's two largest economies