Nissan’s American division has distributed a memo to US dealers asking for patience as the Japanese manufacturer faces financial hardship.
As reported by Automotive News, Nissan Americas chairperson Jeremie Papin addressed the brand’s network of 1070 US dealers, after the Japanese carmaker earlier this month announced plans to cut global production capacity by 20 per cent and axe 9000 jobs to “stabilise and right-size” the business.
Nissan’s operating profit for the first half of Japanese fiscal year 2024 fell 303.8 billion yen (~A$3bn) to 32.9 billion yen (~A$334 million).
“We are working diligently to implement turnaround actions and the stability and future value they will bring to valued business partners like you is a high priority for us,” wrote Mr Papin in a November 30 communication.
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“We are working hard to deliver more details on these action plans. In the meantime, we ask for your patience and understanding.
“We recognize the actions designed to increase product competitiveness, the core of our business, are highly important to bring Nissan back on the growth track.”
A series of organisational challenges have led to Nissan’s current crisis – former CEO Carlos Ghosn was arrested in 2018 for allegedly embezzling corporate funds, and sales have declined in the US and China, two of the carmaker’s biggest markets.
Nissan is also on the lookout for new investors to fill the void left by alliance partner Renault, which is reducing its stake in the business.
The value of Nissan’s shares has fallen by 36 per cent in the past 12 months, now at its lowest since the COVID-19 pandemic shut down borders across the globe.
A report by The Financial Times last week claimed a senior official close to the carmaker said, “we have 12 or 14 months to survive”.
Nissan is taking drastic measures to right the ship by cutting manufacturing and jobs, while the brand’s CEO Makoto Uchida is set to forfeit 50 per cent of his monthly compensation. Other executive committee members are also taking a pay cut.
“These actions put us on a path to secure sustainable profit and cash generation, with an eye to future growth,” explained Mr Papin.
Despite the mounting pressure to find financial stability, Mr Papin reassured dealers that Nissan has “strong levels of liquidity.”
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