Nissan Reports $4.5 Billion Loss in 2024 and Unveils Recovery Plan: How Will It Survive the Crisis?
Nissan, one of the world’s largest automakers, has announced its worst financial performance in over two decades, posting a net loss of $4.5 billion for the fiscal year ending March 31, 2025. Although sales remained relatively stable, the company faces significant financial and operational challenges, prompting management to launch an ambitious recovery strategy called RE: Nissan.
Declining Financial Performance: Large Losses Amid Stable Sales
Nissan’s operating profit plunged by 87.7%, driven by several factors including a drop in sales volume, a less favorable product mix, price pressures, and rising operating costs-particularly restructuring expenses totaling $405 million. Despite this, global sales declined by only 2.8%, with a notable 12.2% drop in the Chinese market offset by a 3.3% increase in North America. Revenues remained nearly flat, decreasing by less than half a percent compared to the previous year.
The biggest challenge lies in rising costs outpacing current revenues. Nissan’s Chief Financial Officer, Jeremy Babin, highlighted that “variable costs are increasing, and fixed costs are higher than what current revenues can support.”
Tariff Challenges and Their Impact on Outlook
Nissan is also grappling with global tariff uncertainties, expected to cost the company approximately $3 billion in the current fiscal year. This complicates financial planning and makes future forecasting difficult amid ongoing international trade tensions.
The RE: Nissan Recovery Plan
In response to the crisis, CEO Ivan Espinosa introduced a comprehensive recovery plan named RE: Nissan, aiming to restructure the company and return to profitability while reducing reliance on high sales volumes. The plan begins by focusing on liquidity, with Nissan currently holding $23 billion in cash and an additional $14.2 billion in available credit lines.
Key cost-cutting measures include laying off about 10,000 additional employees, bringing total workforce reductions to 20,000 by 2027. The company also plans to close 7 of its 17 factories to increase production capacity utilization to nearly 100%.
Improvements in Development and Manufacturing
Nissan aims to cut product development costs by 20%, reduce vehicle design complexity by 70%, and accelerate new model development cycles to 30 months. If successful, these initiatives could save the company around $3.4 billion.
Leveraging Partnerships and Developing New Products
The RE: Nissan plan also involves strengthening existing partnerships to improve supply chains and better serve global markets. Espinosa confirmed that Nissan will continue to develop hybrid vehicles and new crossovers for the U.S. market, alongside plans to relaunch the Skyline model, with anticipation around whether it will be a sedan or a strong successor to the legendary GT-R.
Future Outlook: A Transitional Year Toward Profitability
The year 2025 is seen as a transitional period filled with challenges and critical decisions. However, Nissan’s strong liquidity position provides an opportunity to effectively restructure its operations. Management expects positive results from the recovery plan to begin emerging in fiscal year 2026, with a return to profitability.
Nissan faces a tough test amid a changing economic and competitive landscape, but it still possesses key strengths including stable sales, strong liquidity, and a clear recovery plan. The success of this plan depends on swift execution and adaptability to market challenges, especially tariffs and economic fluctuations.
The question remains whether Nissan can reclaim its position in the global automotive market, but 2025 will undoubtedly be a decisive year shaping the company’s future trajectory.
At Al-Katonia Automotive magazine, we will continue to closely monitor Nissan’s developments and future plans, providing our readers with accurate analyses and reliable information about the global automotive industry.
Tamara is an editor who has been working in the automotive field for over 3 years. She is also an automotive journalist and presenter; she shoots car reviews and tips on her social media platforms. She has a translation degree, and she also works as a freelance translator, copywriter, voiceover artist, and video editor. She’s taken automotive OBD Scanner and car diagnosis courses, and she’s also worked as an automotive sales woman for a year, in addition to completing an internship with Skoda Lebanon for 2 months. She also has been in the marketing field for over 2 years, and she also create social media content for small businesses.
