Nissan’s Transformation Plan to Prioritize Sustainable Growth and Profitability
Nissan Motor Co. unveiled a four-year plan to achieve sustainable growth, financial stability and profitability by the end of fiscal-year 2023. The scalable plan, involving cost-rationalization and business optimization, will shift the company’s strategy from its past focus on inflated expansion.
As part of the four-year plan, Nissan will take action to transform its business by streamlining unprofitable operations and surplus facilities, alongside structural reforms. The company will also reduce fixed costs by rationalizing its production capacity, global product range and expenses. Through disciplined management, the company will prioritize and invest in business areas expected to deliver a solid recovery and sustainable growth.
By implementing the plan, Nissan aims to achieve a five per cent operating profit margin and a sustainable global market share of six per cent by the end of fiscal year 2023, including proportionate contributions from its 50 per cent equity joint venture in China.
Makoto Uchida, Nissan chief executive officer said, “Our transformation plan aims to ensure steady growth instead of excessive sales expansion. We will now concentrate on our core competencies and enhancing the quality of our business, while maintaining financial discipline and focusing on net revenue per unit to achieve profitability. This coincides with the restoration of a culture defined by “Nissan-ness” for a new era.”
The four-year plan is focused on two strategic areas, building on Nissan’s transformation plans will involve actions to restructure, reduce costs and improve efficiency, including “right-sizing” production capacity by 20 per cent to 5.4 million units a year under the assumption of a standard shift operation; rationalizing the global product line-up by 20 per cent, from 69 to fewer than 55 models; and consolidating North American production around core models.
There will also be a prioritization of core market and products in Japan, China and North America; expanding the presence in EVs and electric-motor-driven cars, including e-POWER, with more than 1 million electrified sales units expected a year by end of FY23; and introducing ProPILOT advanced driver assistance system in more than 20 models in 20 markets, targeting more than 1.5 million units to be equipped with this system per year by the end of FY23.
“Nissan must deliver value for customers around the world,” Uchida concluded. “To do this, we must make breakthroughs in the products, technologies and markets where we are competitive. This is Nissan’s DNA. In this new era, Nissan remains people-focused, to deliver technologies for all people and to continue addressing challenges as only Nissan can.”