Global revenues have dropped 51% in Nissan’s first quarter of 2020, compared to last year.
2019 losses tallied over $6 billion and 2020 is looking nearly identical.
Restructuring plans were put into motion last March.
Last year was tough for Nissan and despite leadership changes at the end of the year and restructuring plans, the pandemic has made recovery almost impossible. This is why Nissan is bracing for a second straight year of losses in excess of $6 billion.
Nissan has announced a number of different plans to cut costs so far this year, going so far as phasing out Datsun, and closing plants in Spain and Indonesia. The goal is to cut up to ¥300 billion in fixed costs compared with the 2018-19 fiscal year.
So far in 2020, Nissan’s first quarter has shown a 51% drop in global revenue compared to 2019, according to the Wall Street Journal (subscription required). They’ve now issued a first forecast for the ongoing fiscal year, ending in March 2021, and the numbers are down. They expect revenues of ¥7.8 trillion ($74 billion), a 21% drop, leading to a net loss of ¥670 billion ($6.4 billion).
The medium-term fear is that Nissan won’t get out of the red anytime soon. Nissan’s current and unfortunate situation is a result of Ghosn’s desire for expansion at the expense of new vehicle development. The Nikkei Asian Review (subscription required) says that this lack of new models is turning potential customers away. The ongoing losses and huge spending in 2019 could force Nissan to reduce or cut investments in emerging technologies such as autonomous driving, electric vehicles, and next-generation connectivity. In this case, Nissan would fall even further behind its rivals.
Nikkei says: “Despite sluggish sales due to the coronavirus and a lackluster lineup, Nissan still needs to spend on research and development — raising concerns both inside and outside of the company.”
Nissan wants and needs to avoid trailing its competitors even more. They’ve secured roughly 900 billion yen from loans and bonds since the beginning of the fiscal year. “We’ll need more cash if there is a second wave of the coronavirus outbreak,” a Nissan executive told Nikkei.