November 11, 2024 – The automotive industry is experiencing rapid changes, and the downfall of once-dominant giants can occur swiftly. Recently, the financial reports for the first half of the fiscal year (April to September 2024) from Japan’s seven major car manufacturers have been released, revealing a decline in net profits for Toyota, Honda, Nissan, Mitsubishi, and Mazda compared to the same period last year. Among them, Nissan has suffered the most.
According to the financial results, Nissan’s net revenue for the first half of the fiscal year decreased by 1.3% year-on-year to 5.98 trillion yen. Operating profit plummeted 90.2% to 32.908 billion yen, with the operating profit margin dropping from 5.6% in the same period last year to just 0.5%. Net profit saw a significant decline of 93.5% to 19.223 billion yen.
The second quarter of the fiscal year (July to September) was particularly disappointing. Nissan’s net revenue was 2.99 trillion yen, lower than the 3.15 trillion yen reported in the same period last year. Operating profit was 31.9 billion yen, falling short of the market’s average expectation of 650 billion yen and a far cry from the 208.1 billion yen recorded last year, representing an astonishing 85% year-on-year decrease. The operating profit margin shrank from 6.6% to 1.1%, and the company reported a net loss of 9.3 billion yen, a stark contrast to the 190.7 billion yen profit in the same period last year.
In response to this dire situation, Nissan announced last week that it will cut 9,000 jobs globally and reduce its production capacity by 20%. Additionally, the company plans to sell up to a 10% stake in Mitsubishi Motors to its alliance partner.
Concurrently, Nissan’s CEO, Makoto Uchida, will voluntarily forgo 50% of his monthly salary starting from November 2024, and other members of the executive committee will also take voluntary salary reductions.
