The official cancellation of merger talks with Honda overshadowed other drastic decisions announced hours ago by Nissan to turn things around. Now that the company is riding solo, it must get its act together without relying on a partner to save the day. Honda wanted to turn Nissan into a subsidiary, but that didn't happen. Instead, Nissan is now outlining how it wants to dig itself out of the hole.
The first order of business is to axe 6,500 jobs at car and engine factories. In the initial phase, the headcount will be reduced by 5,300 by FY25 (April 1, 2025, to March 31, 2026), with another 1,200 people to be laid off by FY26 (April 1, 2026, to March 31, 2027). Further job cuts are planned, according to an announcement made in November 2024, when Nissan said the workforce would be reduced by 9,000 employees. The remaining 2,500 layoffs will come from reducing the indirect workforce through a voluntary separation program and eliminating job positions.
Nissan reiterates that global production capacity will decrease by 20%, from five million to four million vehicles annually by FY26. Three factories will be closed, beginning with the one in Thailand during FY2025 Q1. The identities of the other two plants have not been disclosed, but one will be shut down in FY25 Q3 and the other during FY26. Additionally, Nissan is reducing shifts at two assembly plants in the United States: Smyrna in Tennessee and Canton in Mississippi.
Beyond closing factories, reducing shifts, and eliminating thousands of jobs, Nissan has thought of other ways to cut costs. It aims to reduce development lead time by 15 months for a next-gen car, going down from the current 52 months to only 37 months. In addition, the follow-up model will take only 30 months, down by a whopping 20 months compared to the current modus operandi. The intervals mentioned refer to the start of development until production begins.
Elsewhere, Nissan wants to implement a "design simplification" strategy, starting with six major global products. Reading between the lines, the company seems to want to unify its design language across global models. Additionally, parts complexity is projected to decrease by as much as 70% which, frankly, sounds ambitious.
Aside from cutting costs wherever possible, Nissan is also teasing fresh products. A plug-in hybrid Rouge is coming during FY25, followed by an e-Power derivative in FY26. The e-Power model will likely feature a combustion engine serving as a generator to juice up a battery that powers electric motors. As seen in the Qashqai E-Power, the ICE is not mechanically connected to the wheels. The Mazda MX-30 e-Skyactiv R-EV has a similar setup, but uses rotary engine instead.
Nissan intends to roll out the next-generation Leaf, a compact EV, and a new kei car during FY25. In FY26, a large minivan will follow in Japan with a third-generation E-Power system, also earmarked for the Qashqai in Europe and Rogue in the US. Fuel efficiency is touted to increase by 20% compared to the first-gen setup while cutting production costs by 20%. The N7 listed above was unveiled last November for the Chinese market as a large electric sedan co-developed with Dongfeng.
Although the merger deal with Honda is dead, the two Japanese automakers still intend to collaborate on software and electric vehicles. Meanwhile, Nissan is still seeking a different tie-up to "pursue strategic partnership opportunities that have the potential to significantly enhance corporate value." It's unclear whether that means another automaker or a different type of company—perhaps Foxconn?
Nissan might be in the red now, but we could argue it's too big to fail. Tears will be shed, but we're confident the troubled carmaker will bounce back alone or while holding hands with a partner different than Honda.
Source: Nissan
