Nissan is going through a critical period. Between the gradual separation from Renault, increasingly fierce competition, the search for new partners and the need to invest massively in electrification, the Japanese manufacturer is struggling on several fronts. And the financial situation is concerning. Losses are exploding, profits are melting away.
Initially, Nissan forecast a $560 million USD loss for its 2024 fiscal year. This estimate has been revised sharply upwards: the brand now expects to lose between $4.9 and $5.3 billion USD.
Operating profit also fell, to $595.8 million, versus the $841.1 million forecast. Alarming figures for a manufacturer struggling to regain its stability since the departure of Carlos Ghosn.
Liquidity, but for how long?
Despite the gloomy forecasts, Nissan says it still has $23.8 billion in liquidity, including $15.4 billion in immediate cash. That’s substantial for sure, but it only offers a limited runway to turn the company around.
The causes of the storm
Nissan says the drops in sales and profits comes down to a few factors, namely:
A persistent decline in global sales
Massive investments being made to revive competitiveness
Increased competitive pressure, particularly in the Chinese and European markets
And the company is most assuredly not giving up. It is unveiling an ambitious strategy to get back in the race.
North America as a lifeline
The North American market is one of the few showing positive signs for Nissan. Affordable models like the Versa and Sentra are selling well, while the U.S.-assembled Rogue remains a pillar despite trade tensions.
Nissan is also preparing a new generation of the LEAF, new hybrid models and an electric adventure-focused SUV — possibly a revival of the legendary Xterra.
Infiniti and other markets in sight
Nissan’s luxury brand Infiniti is also preparing new products, and Nissan has other launches planned for Asian and European markets. The manufacturer is clearly counting on the renewal of its catalog to reverse recent downward trends.
Bolder at the top
Another promising element is Ivan Espinosa becoming CEO. The Nissan veteran is known for his passion for automobiles and his bold leadership, contrasting with the caution of previous executives. He seems ready to make quick decisions to redefine the brand.
End of the Renault alliance?
In this turmoil, Nissan is also moving towards a gradual disengagement from the alliance with Renault. A recently concluded agreement allows each company to reduce its stake in the other, which could free up funds and give Nissan more strategic freedom.
Discussions with other potential partners — such as Honda or even Foxconn — could also emerge.
The bottom line
The picture is bleak, but not without hope. Nissan has substantial liquidity and a clear recovery plan, and it’s showing signs of strength in North America. Time will tell if that’s enough to overcome what is an unprecedented crisis in the manufacturer's modern history.
