Nissan Motor is bracing for sizable losses this fiscal year, and outlined details of a restructuring, as it tries to rebuild its struggling business without the help of Honda Motor now that the two automakers have formally ended negotiations to combine.
Nissan forecast a net loss of ¥80 billion (R9.6 billion) for the year ending March 31, it said Thursday, compared with analyst estimates for ¥278 billion (R278 billion).
It also lowered its annual operating income outlook to ¥120 billion from ¥150 billion, which was already a major downgrade from its starting guidance of ¥500 billion (R60 billion).
The weak results will pressure Nissan to find another lifeline after talks for a tie-up with Honda were formally ended earlier Thursday.
Less than three months after announcing plans to bring both brands together under a single holding company, Honda and Nissan say that deal is dead, though they’ll continue a strategic partnership with a focus on batteries and electric vehicles.
“It will still be difficult to survive without leaning on future partnerships,” Chief Executive Officer Makoto Uchida told reporters.
Nissan is actively seeking strategic alliances, and will announce an update in mid-March along with the details of a new leadership structure.
The carmaker also revealed details of previously announced measures aimed at turning around its business.
The company will cut 2,500 jobs globally, but add 1,000 positions at shared service centers. It will reduce annual global production capacity to 4 million units from 5 million during fiscal 2026.
Nissan outlined plans to cut costs by ¥400 billion (R48 billion), with about ¥200 billion (R24 billion) coming through reducing sales and administrative expenses and ¥100 billion (R12 billion) from restructuring its manufacturing base.
The company is targeting savings of ¥100 billion by consolidating production lines at three plants — its Smyrna and Canton plants in the US, and a facility in Thailand — to reduce headcount by 6,500.
It will close three plants globally, including one of its centers in Thailand.
Deal Abandoned
The fallout of the scrapped deal is especially acute for Nissan, which has suffered from weak sales, over capacity, an outdated lineup of unpopular models and revolving-door leadership since the 2018 ouster of Carlos Ghosn.
The magnitude of the carmaker’s troubles became obvious late last year, when it revealed a 94% drop in first-half net income and announced plans to cut 9,000 jobs, and reduce production capacity by 20%.
Still, Nissan’s vast manufacturing operations and household brand name remain a draw.
Hon Hai Precision Industry, the Taiwanese maker of iPhones known as Foxconn that’s pushing into EVs, has expressed renewed interest in the automaker.
Chairman Young Liu said Wednesday his company is open to buying Renault SA’s holding in Nissan, though the goal is cooperation rather than buying the 36% stake.
Uchida said that he hasn’t spoken to anyone from Hon Hai’s management.
Separately, KKR & Co. is in the early stages of evaluating an equity or debt investment to improve Nissan’s financial position, Bloomberg News reported, citing people familiar with the matter.
Renault said in a statement Thursday that it had taken note of the Nissan-Honda talks ending and called the terms of the deal, including the omission of any premium, “unacceptable.”
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