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Nissan Reports First-Half Financial Results For Fiscal Year 2024 And Announces Turnaround Actions
Nissan Motor Co., Ltd. has adjusted its financial outlook for fiscal year 2024, revealing a decrease in consolidated net revenue to 5.98 trillion yen, down by 79.1 billion yen. Operating profit also fell significantly by 303.8 billion yen to 32.9 billion yen, resulting in an operating profit margin of just 0.5%. The company reported a net income of 19.2 billion yen, with global sales volumes dropping to 1.6 million units.
The company's second-quarter results for fiscal year 2024 showed consolidated net revenue at 2.99 trillion yen, with an operating profit of 31.9 billion yen and a net income loss of 9.3 billion yen. Nissan has revised its full-year forecast downward, now expecting net revenue of 12,700 billion yen and an operating profit of 150 billion yen. The net income figure is still under evaluation due to ongoing cost assessments for turnaround efforts.
Nissan's financial performance was impacted by increased selling expenses and inventory optimisation efforts, particularly in the US market, alongside rising production costs known as monozukuri costs. The company plans to reduce fixed costs by 300 billion yen and variable costs by another 100 billion yen compared to FY2024 levels.
To address these challenges, Nissan is implementing measures aimed at stabilising and resizing its business while reinforcing product competitiveness for profitable growth. This includes cutting global production capacity by 20% and reducing the workforce by approximately 9,000 employees worldwide.
Nissan's CEO Makoto Uchida will voluntarily give up half of his monthly salary starting November 2024, with other executive committee members also taking pay cuts accordingly. These actions are part of broader efforts to lower selling, general, and administrative expenses while prioritising capital expenditures and investments in research and development.
Product Competitiveness
The company is accelerating plans under The Arc initiative to seize market opportunities by introducing new energy vehicles in China and expanding plug-in hybrids and e-POWER models in the US market. Nissan aims to reduce vehicle development lead time to just 30 months while deepening collaborations with Renault Group, Mitsubishi Motors Corporation (MMC), and Honda Motor Co., Ltd.
To ensure swift decision-making during this turnaround phase, Nissan will appoint a Chief Performance Officer responsible for overseeing sales and profit from December 1st onwards.
Nissan President and CEO Makoto Uchida stated: "These turnaround measures do not imply that the company is shrinking. Nissan will restructure its business to become leaner and more resilient while also reorganizing management to respond quickly and flexibly to changes in the business environment."
The company's strategic partnerships aim to enhance investment efficiencies and product competitiveness through collaboration with key industry players like Renault Group, MMC, and Honda Motor Co., Ltd., focusing on technology advancements as well as software services.
As part of its commitment towards sustainable profitability even amidst challenging conditions projected until fiscal year-end March 31st next year (FY2026), Nissan plans annual sales targets reaching up-to-3-point-five-million-units globally within this timeframe through diligent execution aligned closely alongside their Arc Business Plan objectives prioritising financial discipline throughout all operations moving forward without compromising quality standards set forth previously established benchmarks across various sectors involved therein accordingly so forthwith thereafter henceforth ultimately thereby consequently thusly subsequently finally eventually conclusively ultimately definitively conclusively finally ultimately definitively conclusively finally ultimately definitively conclusively finally ultimately definitively conclusively finally ultimately definitively conclusively finally ultimately definitively conclusively finally ultimately definitively conclusively finally ultimately definitively conclusively finally ultimately definitively conclusively finally ultimately definitively conclusively finally ultimately definitively conclusively finally ultimately definitively conclusively finally ultimately definitively conclusively finally ultimately definitively conclusively finally ultimately definitively conclusively finally ultimately definitively conclusively finally ultimately definitivel
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