Nissan's Dramatic Revamp Will Reduce Platforms and Accelerate Development | Carscoops

      The Japanese firm has stated it "must prioritize self-improvement with increased urgency and speed."

      

      9 hours ago

      by Brad Anderson

      Nissan is reducing its vehicle platforms from 13 to 7 by the fiscal year 2035.

      Upcoming models include the next-generation Skyline, a C-segment SUV, and an Infiniti compact SUV.

      The company announced it will close 7 factories, including a planned battery plant.

      In light of its record financial losses and the decision not to provide an operating profit forecast for the year ending March 2026, Nissan is in a challenging situation, prompting a plan that will involve significant job cuts. The automaker intends to eliminate 20,000 positions from fiscal years 2024 to 2027 and is closing several factories while also reducing its vehicle platform count. Failure of the Re:Nissan recovery plan could lead to the company's downfall as we know it.

      Read: Nissan’s Job Cuts Surge To 20,000 As Ex-CEO Predicts Collapse

      The plan, unveiled alongside Nissan’s latest quarterly earnings, is spearheaded by new president and CEO Ivan Espinosa. After posting a net loss of ¥670.9 billion (around $4.5 billion) for the fiscal year ending March 2025, Nissan targets a total cost reduction of ¥500 billion (approximately $3.39 billion) compared to fiscal year 2024, with hopes of achieving profitability and positive cash flow by fiscal year 2026.

      Wide-ranging Cost Reductions, Job Cuts, and Fewer Platforms

      The cost-saving strategies are extensive and will impact multiple business areas. Besides cutting 20,000 jobs across its global network—including direct, indirect, and contractual positions—Nissan is revamping its development processes. The objective is to lower labor costs by 20% and reduce parts complexity by 70%.

      Moreover, Nissan plans to decrease its platforms from 13 to 7 by the fiscal year 2035. It seeks to shorten the development lead time for new models to 37 months, with an aspiration to further reduce it to 30 months for future releases. Among the new models planned are the next-generation Skyline, a global C-segment SUV, and an Infiniti compact SUV.

      Additionally, Nissan will shut down seven out of its 17 production facilities by the fiscal year 2027 and has canceled plans for a lithium-iron phosphate battery plant in Kyushu, Japan. The company is also pausing advanced product activities temporarily, reallocating 3,000 employees to focus on cost-cutting efforts, and implementing a new governance model that involves a dedicated office staffed by 300 experts solely responsible for cost-related decisions.

      A Focused Product Strategy

      In terms of product strategy, Nissan plans to adapt its approach to meet the distinct needs of various markets. The emphasis will be on the US, Japan, China, Europe, the Middle East, and Mexico, with the US focusing on hybrids and revitalizing the Infiniti brand.

      In China, Nissan aims to advance its efforts in new energy vehicles (NEVs), while in Europe, the brand will concentrate on B and C-segment SUVs. Large SUVs will be prioritized in the Middle East, and there may even be imports of vehicles manufactured in China.

      "In light of the challenging fiscal year 2024 outlook and increasing variable costs, against an uncertain backdrop, we must focus on self-improvement with enhanced urgency and speed, aiming for profitability that depends less on volume," explained Espinosa.

      "As new management, we are carefully reassessing our targets and actively exploring every opportunity to ensure a successful recovery. The Re:Nissan plan is an action-oriented recovery strategy that clearly outlines our immediate needs. All employees are committed to collaborating as a team to implement this plan, with the aim of achieving profitability by fiscal year 2026."