Automaker Nissan Motor plans to further reduce its presence in Europe and outsource its car manufacturing and sales operations to its alliance partner Renault, the Japanese publication Yomiuri said.
As part of its global restructuring plan, Nissan will reduce its distribution channels in 30 countries, especially in Eastern Europe. The company also plans to close its plant in Avila, Spain, and turn it into a warehouse, according to Yomiuri, who did not provide details on the level of outsourcing of Nissan’s operations.
Nissan is currently reducing its operations in Europe to focus on China, the US and Japan. Over the next four years, Nissan will reduce its production capacity by one-fifth and the range of models to reduce its fixed costs by 300 billion yen ($ 2.8 billion) in an attempt to become a smaller manufacturer. and more efficiently, following declining sales.
The decision is part of the new global restructuring plan for the Japanese carmaker, designed to ensure solid growth after the excessive expansion of the past.
Nissan recently revised its forecast for the current financial year to 340 billion yen ($ 3.23 billion) from its previous estimate of 470 billion yen, while analysts expect it to be 335 billion yen, on the background of drastic business restructuring.
Japan’s third-largest automaker posted operating losses of 4.83 billion yen in the third quarter of 2020, well below analysts’ estimates of 80.6 billion yen, following declining sales caused by the impact of the coronavirus pandemic (COVID-19 ). In a similar period in 2019, Nissan reported a profit of 30 billion yen.
Nissan has improved its overall annual sales estimates to 4.165 million vehicles, compared to the previous forecast of 4.13 million units, but still below 2019. But revenue in the fiscal year to end on March 31, 2021 would fall by 19.6%.
In the fiscal year ended March 31, 2020, Nissan posted losses of 671.22 billion yen ($ 6.27 billion), its first annual loss in 11 years, as several years of aggressive expansion followed. by former CEO Carlos Ghosn affected the profitability of the Japanese car group, to which was added the coronavirus pandemic that left its mark on global car sales.
To make a profit, Nissan recently decided to cut hundreds of jobs at its plant in Sunderland (UK) and close its plant in Barcelona (Spain). Nissan also wants to build on its alliance with Renault and Mitsubishi Motors, whose new strategy is primarily to make a profit.
Renault and Nissan have had a partnership since 1999, in which Renault owns 44.3% of Nissan shares, while Nissan controls a 15% stake in Renault shares, but has no voting rights in the French group. The Renault-Nissan alliance, expanded in 2016 by including Mitsubishi, has become one of the world’s largest carmakers.
Currently, the alliance brings together ten car brands (including Dacia, Lada, Samsung Motors, Alpine, Infiniti, Datsun, etc.), has 470,000 employees and 122 plants on all continents.