Nissan Rushes to Save $2.59B and Looks for New Partners After Honda Agreement Falls Through | Carscoops

      Nissan has revealed plans for a turnaround following the conclusion of merger discussions with Honda.

      The company aims to achieve approximately $2.59 billion in savings through workforce reductions and enhanced operational efficiencies.

      While Nissan is considering potential partnerships, Foxconn is more inclined towards collaboration rather than acquiring shares.

      What lies ahead for Nissan? The Japanese carmaker has had to devise a backup plan due to the failed merger talks with Honda, focusing on slashing costs significantly while urgently seeking a new alliance.

      

      Nissan plans to achieve ¥400 billion ($2.59 billion) in savings in the 2026 fiscal year, primarily through job cuts and improving production efficiencies. This initiative has taken on greater urgency following a reduction in Nissan's expected operating profit for 2024, which has been revised from ¥150 billion ($970 million) to ¥120 billion ($780 million) due to lower sales, having previously been cut from ¥500 billion ($3.24 billion) in November.

      Related: Honda-Nissan $60B Merger Officially Abandoned Over Control Issues, Mitsubishi Excluded

      Out of the targeted ¥400 billion savings, approximately $1.94 billion will stem from decreased fixed costs. The plan includes cutting around 2,500 indirect jobs (with 1,000 new positions created at shared service centers) and consolidating production lines at facilities in Smyrna and Canton in the US, as well as in Thailand, resulting in a 6,500 reduction in workforce over two years.

      

      Additional savings are expected from reducing the time taken to develop new vehicles and streamlining product offerings, simplifying components, and eliminating inefficiencies in the supply chain, contributing an estimated ¥100 billion ($650 million). However, Nissan recognizes that merely cutting expenses is insufficient for ensuring its long-term viability amid the rising strength of China's automotive sector.

      “It will still be challenging to survive without relying on future collaborations,” stated CEO Makoto Uchida in an interview with Bloomberg.

      

      Nissan requires another partnership analogous to the failed Honda merger and has announced it will “conduct a strategic review to actively seek new affiliations.”

      Tech powerhouse Foxconn has shown interest in collaborating with Nissan. This week, Foxconn’s chairman, Young Liu, indicated that while they are open to the possibility of investing in the automaker, that is not their primary focus.

      “If cooperation necessitates it, we will consider [buying Nissan shares],” Liu told Reuters. “However, acquiring shares is not our goal; our aim is collaboration,” he added, noting that Foxconn is also exploring potential work with Renault, Nissan’s largest shareholder.