History happens over and over again.
Japanese cars, a force of the auto industry from the East, are experiencing similar stories.
Just like in the 1980s, the auto trade war between the United States and Japan was known as the “second Pearl Harbor incident”, which ended with “voluntary export restrictions” on Japanese cars.
In 2009 and 2015, Toyota and Honda were forced to recall tens of millions of cars from around the world because of the outbreak of pedal doors and Takata airbag doors in the United States.
Every time the pressure of industrial or political decline failed to completely defeat the Japanese car legion.
A similar problem is once again facing Japanese cars: today, Japanese cars and German, legal and Korean cars are facing the impact of the heavy pressure of transformation-the wave of new energy and intelligence has swept the automobile industry since 2019, and traditional giants are no exception.
When Volkswagen faced the dilemma of closing its German plant for the first time, Tang Weishi, chief executive of Stellantis, resigned early.
Nissan, on the other hand, has been criticized for its latest results: revenue fell 1.
3 per cent to 5.
98 trillion yen in the first half of 2024 (April-September), and some were surprised by a 93.
5 per cent drop in net profit, regardless of the amount still reaching 19.
223 billion yen.
It is false to say that Nissan has no pressure, but what do you think of the degree of such pressure? With the decline of financial figures, some people are depressed and sink, while others hit bottom and rebound, squat and jump.
What kind of cars do you think Nissan or even the whole Japanese car is? With an in-depth observation of financial common sense, in fact, the change in net profit is the least surprising.
The addition of non-recurrent profit and loss, cumulative provision, or high and low base will lead to more drastic fluctuations in the amount of profit and profit margin.
The more critical elements are two points: one is other key financial figures such as cash flow.
In contemporary enterprises, what is more frightening than losses is the stagnation of liquidity.
Second, where are the profits going? if it is a huge cyclical investment, including research and development, manufacturing, channels and other areas, then it is obviously squatting for take-off.
Nissan, as a giant car company with cumulative sales of more than 100 million, has experienced much more than one storm.
But there is always the illusion of onlookers, as if “a 90% drop in profits” is worse than a “loss”.
Conversely, in the eyes of in-depth industry observers, many car companies are in the period of profit decline, or even huge losses, but do not sink.
Nissan’s earnings report a sharp decline in profits, which also shows a faint offensive.
After all the first step in shooting an arrow at the target is to draw the bow “backward”.
Minor injuries are not fatal and there is no need to get off the line of fire.
indeed, Nissan’s financial results this time are not good results.
But the operation of the automobile industry is much more complicated than the examination papers of the student days.
Bears may be concentrated in three dimensions: declining global sales declining profits and negative free cash flow.
First of all the decline in global sales is mainly due to a slowdown in sales in major countries.
This is especially true in the world’s two major new car markets, China and the United States.
Between April and September 2024, car sales in China experienced the largest decline of 14.
3 per cent, while the US market also fell 2.
7 per cent, while sales in Japan fell 2.
4 per cent.
This led to a 3.
8 per cent year-on-year decline in Nissan’s global sales over the same period.
However, from a horizontal point of view, Nissan’s 3.
8% decline in global sales is not so bad.
In fact, Nissan’s year-on-year decline in sales in the United States is lower than that of the world, especially the Rogue (China’s Qijun) is one of the top 10 best-selling cars, selling more than 189000 vehicles as of September 2024 alone.
In the European market, Nissan’s Haoke and Juke continue to have a strong momentum, and the Haoke model has long topped the UK sales list.
Let’s take a look at profits.
As far as the regional market is concerned it is that the profits of the United States are in a whirlpool.
The whole American car market has high interest rates and unprecedented default rates, coupled with Nissan’s slow replacement of North American models, adopting promotional measures such as price discounts and interest-free loans.
If we say that in the first half of last year, North American profits contributed 241.
3 billion yen, accounting for 70% of the company, this year it will become a loss of 4.
1 billion yen.
In addition, the cost of electrification and intelligence is huge, and Nissan is preparing for the next product offensive, which will lead to higher costs, which will be bad for the current year’s profits– however, it is long-term good news.
The reasons for the negative free cash flow of enterprises mainly include the following aspects: enterprises are in the stage of rapid development, market competition and sales decline, improper cost control , the impact of investment activities, financial management problems, external environmental factors and so on.
For Nissan, if “negative free cash flow” can be stressful, then Nissan’s overall cash position is OK.
Net cash in Nissan’s auto business remained at a solid level of 1.
3 trillion yen.
In addition, the company’s liquidity position is equally good, with an unused commitment limit of 1.
9 trillion yen and cash equivalents of 1.
4 trillion yen.
With an annual consumption of 600 billion yen Nissan can operate for more than a year with only 1.
4 trillion yen in cash and can even reach five and a half years with unused commitments.
As Nissan spokesman Shiro Nagai said, Nissan has plenty of liquidity and has “multiple sources of funding” to repay debt over the next five years, including currently available liquidity, car cash flow, dividends from its lucrative sales financing business, and new bond issues.
To sum up it is true that Nissan has encountered a crisis but minor injuries are not fatal and there is no need to go off the line of fire.
It is worth mentioning that Nissan suffered a more serious crisis in the 1990s and suffered losses.
But with the injection of capital and capital control, especially the operation of the “cost killer” Carlos Ghosn, Nissan managed to turn things around.
Now Nissan CEO Uchida is trying to prevent further deterioration of the company’s balance sheet while resisting pressure from aggressive investors and looking for ways to revive the brand.
Japanese businessmen are the most cautious in the world.
Marianne Keller wrote in the car War-the race to occupy the 21st century.
Even in the 1980s and 1990s when Toyoda Shoichiro led Toyota to new heights Nissan’s Kume Yutaka still had the same reputation as Zhang Ichiro in the industry.
And while Toyoda Shoichiro represented the radical expansion of Japanese cars at that time, Kume Yutaka was more conservative like Toyota today.
Under this conservative and tolerant way of thinking, once Japanese car companies enter the “low profile” postureIt may not only be a real defeat, but also a blow in the hope of making a comeback.
Take the Japanese Big Brother Toyota Motor as an example.
Toyota after entering the 21 century is now the Toyota in everyone’s eyes: steady, conservative and comprehensive.
But Toyota’s profits fell twice in the 2009-2010 and 2016-2017 fiscal years.
Needless to say in the 2009-2010 fiscal year the pedal door dealt a heavy blow to Toyota’s finances and could eat up all Toyota’s profits just by compensating and recalling tens of millions of vehicles.
What is the fiscal year 2016-2017? This is divided into two parts: 940 billion yen (about 57 billion yuan) from currency fluctuations and 530 billion yen (32.
1 billion yuan) from increased spending.
Where is the increase in expenditure? For those familiar with Toyota and Japanese cars, it is easy to think of a name-TNGA, the magic weapon Toyota relies on in the current decade.
Toyota has been accumulating energy for the TNGA architecture since 2015 and 2016-2017 is precisely the year in which investment is most concentrated.
Even began to introduce this concept to China in 2017, and the power of TNGA in 2018 is reflected in the eighth generation Camry.
So, for example, in Toyota’s fiscal year 2016-2017, profits plummeted for growth in subsequent years.
Toyota is not alone.
Volkswagen, which is big enough to compete with Toyota, saw profits plummet or even losses in 2009, 2015 and 2020.
In addition to the “tumultuous disturbance” of the merger with Porsche in 2009, it has something to do with the pre-R & D and manufacturing investment of the MQB modular platform in 2012.
in 2015, in addition to the compensation for emission doors, it is also inseparable from the sky-high budget of the MEB platform.
and the profit decline in 2020 is caused by the heavy blow of the epidemic and sometimes the CEO Deiss is determined to invest billions to build intelligence.
Even the new power of building cars cannot break away from the law of “squatting before take-off”.
Take Tesla’s financial report as an example.
The relatively serious loss rate occurred in 2012 (Model S mass production) and 2015-2017 (preparation for Model 3 mass production and construction of gigabit factories).
Each large-scale expenditure leads to the “ugly” financial figures of that year, but determines the smooth development of the follow-up.
Then Nissan today doesn’t have the same shadow? The current situation of Nissan is the same as the new auto power in China a few years ago, which is not only in the stage of rapid development, but also making crazy investment abroad.
The implication is to burn money crazily.
For a four-year brand-new strategic plan-“The Arc Nissan Arc Plan”, the aim is to accelerate the transformation of electric drive, enhance enterprise value and enhance comprehensive competitiveness on a global scale.
In 2021 Nissan announced that it would spend 2 trillion yen ($17.
59 billion) over the next five years to accelerate the electrification of cars and will launch an all-solid-state battery model in 2028.
According to incomplete statistics, Nissan has done the following in the past year: Nissan invested more than $400m in Fisker’s truck platform to gain access to Fisker’s EV pickup platform.
Nissan will invest up to 600 million euros in Renault’s Ampere division.
Nissan continued to invest heavily in its plant in Sunderland in the UK to step up production of new Leaf electric vehicles.
Nissan Egypt signed a $45 million investment agreement to produce a third model locally at its plant.
Nissan will invest about 150 billion yen in the production of lithium iron phosphate batteries for cars.
Nissan plans to invest more than 400 billion yen in battery capacity.
Nissan recently announced plans to invest more than $700 million to build its popular Kicks model in Aguascalientes, Mexico.
Nissan announced that it would invest billions of dollars in its Sunderland plant to produce the new Qashqai as well as new Juke and Leaf models.
Nissan will invest an undisclosed amount in ChargeScape.
Renault-Nissan will invest $600 million to $700 million to turn India into an export hub.
The last round of product slowdown and stagnant electrification plans in Nissan have dragged down the current development, so we would rather carry a heavy burden at the moment than “invest in the future”.
In short, Nissan is in a window between the old and the new.
Through this series of investments, Nissan occupies a leading position in the field of automotive high-capacity battery technology, and has made it clear that it will apply this technology to mass-produced models.
At the same time, Nissan has also maintained outstanding progress and competitiveness in the exploration of self-driving technology, including artificial intelligence and other key areas.
Through these measures Nissan has not only sowed rich seeds of hope for the future but also made full preparations for the upcoming harvest season.
The new test is whether it can rebound, and for Nissan, the coming 2025 will undoubtedly be engraved in a decisive chapter in its long history.
In the face of the grim reality of declining sales, the mounting debt burden and the increasingly fierce competition in the field of electric vehicles, the once brilliant carmaker is facing an unprecedented survival challenge.
In this existential battle, Nissan’s road to victory will depend on its ability to make brave and forward-looking decisions, build a solid network of strategic alliances, and win strong support from the government to withstand the cold winter of the industry.
through this turbulent period of uncertainty.
In November, Nissan shocked the industry with a big news that it cut about 9000 jobs worldwide and announced that it would slash capacity by 20% to 4 million vehicles.
This move not only reflects Nissan’s deep reflection on the current market situation, but also demonstrates its determination to survive without arms.
In the adjustment of the global layout, Nissan has not only integrated production bases in Thailand and other places, but also reduced production in the US market by about 20%, and sales in the European market have also suffered a sharp decline.
as a result, the production of British factories has been cut by about 20%.
Behind these painful decisions is Nissan’s urgent need to optimize resource allocation and improve production efficiency, as well as its strategic consideration to enhance the enterprise’s anti-risk ability by reducing redundancy and focusing on core business.
In the face of industry change, Nissan knows very well that speed is life.
As a result, the company announced that it would shorten the development cycle of new cars to 30 months, a move aimed at responding more quickly to market demand by accelerating product iterations, especially in the field of new energy vehicles.
Nissan plans to increase the launch of new energy models in China, the world’s largest market for new energy vehicles, especially the promotion of plug-in hybrid vehicle (PHEV) and e-POWER technology, in order to occupy a place in the wave of green travel.
This series of actions is not only an accurate grasp of market trends, but also a reflection of Nissan’s deep understanding of the future travel mode.
Under financial pressure, Nissan launched a comprehensive internal reform.
The company’s CEO Uchida voluntarily cut his salary by 50%, and other senior managers also responded, demonstrating the determination of senior executives and employees to tide over the difficulties.
Uchida made it clear that the reform of the internal management structure is a top priority, and the goal is to build a flexible system that can quickly adapt to market changes, especially in the field of electric vehicles and new energy vehicles.
To this end, Nissan introduced the new position of “performance officer”, held by the experienced Guillaume Cartier, focusing on improving sales performance and profitability, and his appointment marked a new starting point for Nissan in the pursuit of efficiency and effectiveness.
In this important market, Nissan’s current chief financial officer, Stephen Ma, will serve as chairman of Nissan’s China management committee and will continue to report directly to Makoto Uchida.
Ma Zhixin not only has rich experience in global business management, but also has a comprehensive understanding and rich experience of the Chinese market.
Therefore, he will be mainly responsible for formulating long-term strategies in line with the Chinese market and improving local operations.
External cooperation has also become a key part of Nissan’s revival.
Nissan announced that it will deepen its cooperation with Renault, Mitsubishi and Honda, explore strategic cooperation opportunities in technology and software services, and enhance overall competitiveness through resource sharing and complementary advantages.
Uchida stressed that unity and cooperation is the only way for Nissan to return to the growth track, and the goal is to build a resilient company that can not only resist market fluctuations, but also lead automotive technology innovation.
Of course a core part of Nissan’s survival plan is to find stable investors.
As Renault gradually reduced its stake in Nissan, Nissan began to actively look for new partners to fill the gap.
Both financial institutions and companies like Honda that share a common vision for the development of electric vehicles may become an important support for Nissan’s future development.
This step is crucial for Nissan, which is not only about capital injection, but also about strategic coordination and the stability of long-term development.
The next 12 to 14 months will be a critical period for Nissan.
While ensuring that cornerstone investors are found, companies must unswervingly press ahead with electric vehicle strategies, implement effective cost control measures, and remain robust in the face of increased uncertainty in the global economy.
Although the road ahead is full of thorns, Nissan’s profound heritage and a series of strategic measures have brought it a glimmer of vitality.
Through continuous self-innovation and external cooperation, Nissan is expected to be reborn in this reshuffle of the automotive industry, once again proving its strength and foresight as an industry leader.
In short, Nissan’s road of transformation is full of challenges, but every step embodies expectations and efforts for the future.
In this battle related to survival, Nissan is interpreting the profound connotation of “cultivating new opportunities in crisis and opening a new game in changing situations” with practical actions, and its story, it will also become a valuable inspiration for courage, innovation and cooperation in the automotive industry and the business world as a whole.
, return to the first electric network home page >.
