Warnings Nissan is on the brink of collapse after a brutal few years at the automaker, which was beset by leadership chaos, strategic shortcomings and fierce competition from Chinese rivals.
Like many global automakers, the Japanese giant is struggling in China, where local manufacturers are gobbling up market share with affordable electric vehicles and hybrids that feature advanced technology.
But Nissan’s bigger problem may lie in the United States, where the country lacks a credible supply of hybrid cars given growing consumer demand.
It is also facing headwinds in a number of other markets, including Britain, with senior executives expressing concerns about Labor’s strict mandates on electric vehicle production.
Nissan said last month it would cut 9,000 jobs and 20 percent of its global production capacity as it works to cut costs by $2.6 billion in the current fiscal year, amid a sales slump in China and the US.
The Japanese car company, which employs 7,000 people in Britain – including 6,000 at its flagship plant in Sunderland – has embarked on a massive cost-cutting program after heavy losses.
CEO Makoto Uchida will take a 50 percent pay cut and it has now been reported that Chief Financial Officer Stephen Ma is stepping down.
Former Nissan chairman Carlos Ghosn was famously smuggled out of Japan in a box in 2019 while awaiting trial for understating his salary and misusing company funds
But insiders fear this may not be enough the Financial Times He quotes a ‘senior official’ at Nissan as saying: ‘We have 12 or 14 months to survive. This is going to be difficult. And ultimately we need Japan and the US to generate money.”
Nissan’s pledge earlier this year to cut the cost of making its electric vehicles by 30 percent reflects one of its biggest challenges: the growing popularity of ultra-cheap electric vehicles made in China.
Chinese brands such as BYD, Chery, Geely and SAIC Motor have seen enormous sales growth.
BYD, which stands for Build Your Dreams, recently surpassed Tesla’s quarterly sales, with sales for the three months ended September 30 of $28.2 billion (£22 billion), $3 billion more than its US rival.
Nissan’s global sales fell 3.8 percent to 1.59 million vehicles in the first half of the current financial year, largely due to a 14.3 percent decline in China.
This comes as the company builds up a growing pile of debt, which could rise to as much as $5.6 billion (£4.4 billion) by 2026, according to reports.
The challenge from Chinese competitors coincides with Nissan’s self-acknowledged inability to adapt to changing consumer demands – particularly the growing popularity in the US of hybrid models.
The company currently does not sell a plug-in hybrid model in the country – a notable contrast to its Japanese rivals Toyota and Honda.
Chinese brands such as BYD, Chery, Geely and SAIC Motor have seen enormous sales growth
Nissan’s own CEO, Makoto Uchida, admits this is a “lesson learned.”
“We have not moved with the times,” he said at a news conference. “We could not have anticipated that hybrid electric vehicles and plug-in hybrids would be so popular.”
The automakers’ troubles have been compounded by the lingering fallout from the demise of former chairman Carlos Ghosn, who was famously smuggled out of Japan in a box while awaiting trial for underestimating his salary and abusing of corporate funds.
Ghosn led the company when it entered into an alliance with French rival Renault, but this was significantly scaled back after his arrest.
Renault is now further selling its stake, meaning the Japanese giant could need cash support from the Japanese or US government in the coming year to stay afloat, the FT reports.
There have been suggestions that Nissan could strengthen ties with Honda, Japan’s second-largest carmaker, which could buy a stake in the smaller company – although sources described this as a ‘last resort’.
Nissan has a significant presence in the UK, with the Sunderland factory considered a success story in British manufacturing since its establishment in 1984.
It remains competitive in the country and in terms of sales volumes it is the eighth most popular brand with 86,300 models sold until the end of October.
Only VW, Audi, BMW, Kia, Ford, Mercedes and Toyota have sold more cars in Britain this year than Nissan.
Nissan’s bigger problem may be in the United States, where it doesn’t have a credible hybrid car offering despite growing consumer demand. Pictured is the Toyota Prius, the world’s most popular hybrid
This Qashqai (35,271 sales) and Juke (30,548), both produced at the Sunderland plant, are the third and fourth best-selling models in 2024.
However, Nissan has recently raised concerns that its ability to invest further in the country could be damaged by the government’s Zero Emissions Vehicles Mandate (ZEV), which forces companies to increase the share of electric vehicles they sell annually until a a total ban on new petrol and diesel. engines in 2030.
This year, electric vehicles must make up 22 percent of a company’s car sales and 10 percent of van sales, with the threshold rising annually and makers facing a £15,000 fine for each sale beyond that.
Labour’s 2030 target is five years earlier than that of former Tory Prime Minister Rishi Sunak.
Nissan warned last month that failure to meet the target would result in significant fines for manufacturers unless credits are purchased from electric-only brands – none of which produce vehicles in Britain.
The company called for more flexibility in borrowing credits from future years and a two-year monitoring period for 2024 and 2025 in lieu of possible fines for automakers.
Guillaume Cartier, chairman of Nissan’s Africa, Middle East, India, Europe and Oceania region, said: ‘It threatens to undermine the business case for car manufacturing in Britain, and the viability of thousands of jobs and billions of pounds of investments.
‘We now need to see urgent action from the government by the end of the year to prevent a potentially irreversible impact.’
MailOnline has contacted Nissan for comment.