Nissan reveals its radical turnaround plan

Nissan reveals its radical turnaround plan

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Nissan has just announced its plan to return to its former glory. In a bold, almost painful move, the company has just revealed a radical recovery plan that includes job cuts, factory closures, and an indefinite pause on all new car development projects scheduled beyond 2026.

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That said, the brand has set a goal to save 500 billion Japanese Yen, which is roughly R63 billion, by cutting both fixed and variable costs compared to what it spent in the 2024 financial year. This move will help the company become more profitable and generate more cash from its vehicle business by the end of the 2026 financial year. 

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While it’s a bitter pill to swallow and sad to see the brand that was once a powerhouse go this route, Nissan plans to cut a total of 20,000 jobs globally by 2027– an expansion of its earlier plan that already included 9,000 positions on the chopping block. As it stands, the staff reduction will affect a wide range of jobs, including both full-time and contract workers across all departments, such as manufacturing, sales, admin, and research and development. 

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On the other hand, its vehicle plants will be cut from 17 to 10 by the 2027 financial year. Although it is unclear how this decision will affect the Nissan South Africa’s plant in Rosslyn, the facility has recently encountered difficulties, such as the 2024 discontinuation of the incredibly popular NP200 bakkie. However, Nissan has assured the public that it’s busy exploring opportunities to expand the plant and grow its product portfolio in the region. Currently, the Rosslyn plant only produces the Navara for local and export markets. 

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Also, Nissan aims to cut down on engineering costs and make car development quicker by reducing how complex its cars are and where they are built. Part of that includes shifting work to more cost-effective locations and streamlining their global research and development centres, which should help reduce the average cost of labour by 20%.

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They're also going to make cars with fewer parts, reducing part complexity by 70%, which makes building and maintaining them easier and cheaper. Right now, Nissan builds cars on 13 different platforms, but by 2035, they plan to cut that down to just 7 platforms.

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The brand also says that it aims to speed up the development of its cars. The first car in a new model family will now be ready in about 37 months, and follow-up versions just 30 months later, much faster than before. Among the first models to emerge from the ‘new’ Nissan brand are a new Skyline compact SUV and a fresh addition to Infiniti’s compact SUV lineup.

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"In the face of challenging FY24 performance and rising variable costs, compounded by an uncertain environment, we must prioritise self-improvement with greater urgency and speed, aiming for profitability that relies less on volume. As new management, we are taking a prudent approach to reassess our targets and actively seek every possible opportunity to implement and ensure a robust recovery," says Nissan president and CEO Ivan Espinosa. 

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It’s hard not to feel a twinge of sadness watching a brand like Nissan, once a bold symbol of invention and driving excitement, undergo such a dramatic transformation. As a reminder, this company gave us legends like the GT-R, the soulful 370Z, the indestructible 1400 Champ, the rugged Sani, and the mighty Patrol. 

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When asked for comment, Nissan South Africa’s Communications Lead, Thato Maphoto simply indicated that Nissan is currently "conducting a detailed internal assessment regarding the potential plant closures".

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And yet, despite the tough decisions that the brand has to make, there’s a sense that it isn’t just downsizing. It’s recalibrating. If it gets it right, we could witness the early chapters of one of the industry’s greatest comebacks.

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