Nissan, one of Japan’s leading automakers, is grappling with its worst financial crisis in decades, projecting a staggering net loss of ¥700-750 billion ($4.91-$5.26 billion) for the fiscal year ending March 2025. This figure dwarfs the earlier estimate of ¥80 billion ($560 million), driven by massive impairment charges and restructuring costs. To navigate this turbulent period, Nissan is taking bold measures, including layoffs, plant closures, and asset sales, while seeking new partnerships to secure its future. Here’s a closer look at Nissan’s challenges and its roadmap to recovery.
Main Highlights
Nissan’s financial woes stem from a combination of declining sales in key markets like the U.S. and China, rising production costs, and a failure to capitalize on the growing demand for hybrid and electric vehicles (EVs). The company recorded impairment charges of over ¥500 billion ($3.5 billion) after reviewing its production assets across North America, Latin America, Europe, and Japan, with additional restructuring costs exceeding ¥60 billion ($420 million). These charges reflect the reduced value of assets as Nissan recalibrates its operations to match weaker demand.
To address these challenges, Nissan is implementing a sweeping restructuring plan under its new CEO, Ivan Espinosa, who took over in April 2025. The company plans to cut 20,000 jobs—about 15% of its global workforce—by 2028, including 9,000 layoffs announced in November 2024. Additionally, Nissan will close seven of its 17 global plants by 2027, reducing its production capacity by 20% to 4 million vehicles annually. One confirmed closure is a plant in Thailand, with two more yet to be named. In the U.S., production shifts at plants in Tennessee and Mississippi will be scaled back, and plans for two electric sedan models and 13,000 Rogue units have been scrapped.
Nissan is also exploring financial maneuvers to bolster its balance sheet. The company is considering a sale-and-leaseback deal for its Yokohama headquarters, valued at over ¥100 billion ($698 million). This move could provide critical liquidity to cover restructuring costs while allowing Nissan to continue using the facility. The automaker aims to slash costs by ¥500 billion ($3.4 billion) by 2026, with a goal of returning to profitability by the same year.
After failed merger talks with Honda in February 2025, Nissan is seeking new strategic partnerships. Taiwanese tech giant Foxconn has expressed interest in collaborating, potentially acquiring shares, while Nissan continues to work with Renault and Mitsubishi on electrification and software development. These partnerships aim to enhance Nissan’s competitiveness in the rapidly evolving EV market and address its lag in hybrid vehicle offerings.
Looking Ahead
Nissan’s path to recovery is steep, with external pressures like U.S. tariffs on imported vehicles—accounting for 45% of its U.S. sales—adding to the strain. CEO Espinosa has emphasized a “Re:Nissan” recovery plan, focusing on leaner operations, faster product development, and a pivot toward high-demand vehicles like hybrids and EVs for markets like the U.S. and China. While these steps show determination, Nissan’s ability to execute this plan amid a hyper-competitive global market will be critical to its survival.
