Nissan shuts plants, culls jobs after worst loss in 25 years

YOKOHAMA - Nissan Motor vowed to close seven factories and slash 20,000 jobs after posting its biggest annual loss since French carmaker Renault rescued it from near bankruptcy a quarter-century ago.

The Japanese carmaker decided against issuing an operating profit forecast for the fiscal year ending March 2026, and reported a net loss of 670.9 billion yen (S$5.9 billion) for the year that ended in March.

“The reality is clear,” Nissan’s newly minted chief executive officer Ivan Espinosa said on May 13 in his first post-earnings briefing since taking the top job in April. “Nissan must prioritise self-improvement with greater urgency and speed.”

Espinosa, who has held roles at Nissan since 2003, is accelerating its restructuring. The carmaker will close the seven manufacturing facilities by the 2027 fiscal year, with annual production capacity set to fall to 2.5 million units from 3.5 million last year. Details around which seven facilities would close were not given.

Nissan also confirmed

it will cut 20,000 jobs

, including the loss of 9,000 roles it announced in November. The measures are aimed at cutting costs by 500 billion yen.

The ailing Japanese automaker has struggled to turn around its business as its ageing line-up failed to win over consumers in the US and China. It had already replaced most of its top executives after efforts to combine with Honda Motor fell apart earlier this year, leaving it in urgent need of another lifeline.

Asked whether he had any regrets regarding the Honda deal falling through, Mr Espinosa said the rival carmaker was still “one of many candidates” when it comes to projects, partnerships, integration, capital investments and spin-offs. Despite the failed merger, Nissan and Honda have previously said they are continuing a strategic relationship focused on EVs and batteries.

“I cannot give you a timeline now but we are working actively on it. The sooner, the better,” Mr Espinosa said on any date for a new partnership.

Mr Espinosa’s changes signal a more decisive way forward than that forged by previous CEO Makoto Uchida, who was criticised for not being aggressive enough. He expressed his reluctance to shutter factories during the talks with Honda, citing Nissan’s pride and the need to maintain its operational independence.

Since his departure, Nissan has indicated broader plans to cut output, announcing last week that it was abandoning a proposal to build a battery plant in Fukuoka in order to focus on its own recovery.

But even with deepening cuts, Nissan faces an uphill battle in finding a financial savior.

Hon Hai Precision Industry had emerged as a front-runner post Honda, with chairman Young Liu saying in February his company had approached Nissan and Honda about potential cooperation when the two were involved in talks to combine. The Taiwanese iPhone maker known as Foxconn has been clear about its desire to assemble electric vehicles for Japanese carmakers, and earlier this month signed an agreement with Mitsubishi Motors to do just that.

Meanwhile, Nissan’s restructuring efforts risk being derailed by US tariffs on imported cars and auto parts. The carmaker said it expects to see a 450 billion yen impact from policies, which is included in its forecast for a 200 billion yen operating loss in the first quarter.

Exports from Mexico and Japan account for almost 45 per cent of Nissan’s sales in the US, chief financial officer Jeremie Papin said. Duties will affect 300,000 units in exports from Mexico, and 120,000 units from Japan, he said.

US President Donald Trump’s ever-changing trade policies are already rippling through the global auto sector with some manufacturers like Stellantis and Mercedes-Benz Group pulling their earnings forecasts and others warning of substantial hits to the bottom line. General Motors slashed its profit outlook due to as much as US$5 billion (S$6.5 billion) of exposure to auto tariffs, while Ford Motor expects a US$1.5 billion annual hit to results.

Japan’s top carmakers have joined the chorus in sounding the alarm over the implications of MrTrump’s wild levies. Toyota Motor said it estimates a 180 billion yen hit to operating income over just two months, and Mazda Motor withheld annual guidance while warning of a 10 billion yen impact just for the month of April.

Separately, Renault, which has a roughly 36 per cent stake in Nissan, said it expects to see a US$2.4 billion hit to its first-quarter net income due to the Japanese carmaker’s turnaround efforts.

Mr Espinosa said Nissan is looking to enhance its partnership with Renault in Europe, India and Latin America, and work with Mitsubishi in the US on the development of pickup trucks and electric-vehicle batteries. It may also look to work with Honda for the US, he said.

Shares in Nissan closed up 3 per cent on May 13, trimming declines for the year to 26 per cent. BLOOMBERG