Fears over future of iconic car brand hit by £4BILLION loss – after axing 9,000 jobs & failed ‘merger’ talks with rival
A MAJOR car manufacturer has revealed they are set to lose £4billion this year after axing 9,000 jobs.
The figure is far higher than the £426million bosses had previously forecast for the 2024/2025 financial year.
Nissan have now predicted they could make a net loss of anywhere between £3.7billion to £4billion.
Meanwhile the company recorded a £2.3billion income a year ago.
The Japanese manufacturer has put loses down to costs to carry out a strategy planned by their new CEO Ivan Espinosa.
He made way for a £2.6billion decrease in the value of production and forked out £316million in restructuring costs.
Restructuring included moves to axe 9,000 jobs internationally and scrapping a factory in Sunderland.
Alan Johnson, the company’s senior vice-president for manufacturing, supply chain and purchasing, told MPs this week the UK is “not a competitive place to be building cars”.
Despite the losses, Nissan predicted it will end the year with close to £7.9billion – a fraction of the £8.2billion brought in last financial year.
The firm also said it is due to round up the year with debts of £10billion.
Speaking to Autocar last month, Espinosa said: “Costs have to be improved both on the fixed and viable side.”
Performance officer Guillaume Cartier added: “When we have the right products, we have proven we can grow.”
This follows Nissan announcing they were “on the brink of collapse”.
The firm revealed three news EVs as its boss vows to save its UK factory from closure.
Nissan shared the arrival of the all-new Leaf EV and a revived Micra model – with a shiny new battery-powered supermini.
Also launching soon is the Qashqai – one of the UK’s best-selling cars – and a new Juke, which will be upgraded in the Sunderland plant.
After rumours swirled about the future of Nissan’s UK factory, the car brand’s boss François Bailly said he was committed to maintaining the Sunderland factory, calling it the “jewel of Europe”.
But while Nissan’s head is set on keeping the UK based production unit, he said the country’s ZEV mandate is making “life very difficult”.
The car brand‘s performance officer Guillaume Cartier told Autocar: “We still have 10 years, so we need what we call two legs or a dual strategy: what are the cars that we can extend, and what are the technologies that we want to invest in.”
Earlier this month the company even called time on its former CEO Makoto Uchida.
Yasushi Kimura, chair of Nissan’s board of directors, said: “Given the industry wide challenges and Nissan’s performance, we believe it is necessary as well as appropriate to change the top management team.”
Indeed, signs of trouble began in May when they asked dealers in the US to begin selling cars at a loss.
News then broke that Nissan and Honda were to expand their earlier partnership to work on electric vehicles and software alongside fellow manufacturer Mitsubishi.
But in November, they dropped the bombshell announcement that some 9,000 employees globally would be laid off, along with the reduction of production.
By the end of 2024, some company executives had disclosed that Nissan had 12 to 14 months left to survive – a frightening prospect, with their best chance of continuing being a merger with another company.
In December, the CEOs of Nissan and Honda met for official talks and announced they would officially look to merge.
But these talks deteriorated in the new year as Nissan withdrew from the deal, following Honda’s proposal to make them a subsidiary.
However the tide could finally be turning for Nissan as its new boss announced that talks of a merger with its major rival are back on.
Nissan’s CEO Ivan Espinosa has said the company remains “very open” to partnerships after its merger talks with competitor Honda spectacularly collapsed.
The company’s chief performance officer, Guillaume Cartier, also said Nissan had “never stopped” talking with its Japanese rival, confirming that the two were still actively working towards a potential partnership.
Espinosa has said his company faces up to five simultaneous crises, including a damaged brand, low morale, and the execution of a sweeping turnaround.
The 46-year-old appears to be open to partnerships, saying there were “no taboos” around the idea of having future partners help plug the gaps in its range of motors.
Speaking at a company event, he said: “The way we are seeing partners is broadly, not only thinking about cars but how to push Nissan into the next era of technology”.