2 weeks Ago By [email protected] (Tom Keighley)
The boss of Nissan has insisted the troubled automotive giant has the resources and determination to stage a turnaround despite it bracing for a £3.7bn net loss. In a revised outlook for its 2024 financial year, the car maker now expects net losses to be more than nine times what it previously set out, at between ¥700-750bn, equivalent to about £3.
7bn. Chief executive Ivan Espinosa, who was appointed earlier this month, said that despite the challenges Nissan has significant financial resources and a strong showroom of models that would see it change its fortunes. The huge rise in net losses, which were originally estimated at ¥80bn (£419m), came as Nissan identified ¥500bn of impairments relating to its factories across the world, including in Europe.
The cost of a major restructuring effort - which will see three factories closed, thousands of jobs cut and global production slashed by 20% - is now expected to be more than ¥60bn (£314.2m). At the same, Nissan revised down full-year sales volumes - by 3.
35 million vehicles - and operating profits, which it said was down to a competitive environment and deterioration in sales performance. The Japanese manufacturer is looking to make cost savings of about £2.08bn as it battles severe financial challenges and looks to reset in the wake of a failed merger attempt with Honda.
Only one of the three factories it proposes to close has been identified, leading to concerns for the Sunderland plant which employs about 6,000 and is seen as one of the most productive in its stable. Chief Executive Ivan Espinosa said: “We are taking the prudent step to revise our full-year outlook, reflecting a thorough review of our performance and the carrying value of production assets. We now anticipate a significant net loss for the year, due primarily to a major asset impairment and restructuring costs as we continue to stabilize the company.
"Despite these challenges, we have significant financial resources, a strong product pipeline and the determination to turnaround Nissan in the coming period." The revised numbers come in the same week that senior Nissan executive Alan Johnson delivered a stark warning to MPs in Westminster. He said the Sunderland factory “pays more for its electricity than any other Nissan plant in the world” and warned the UK is “not a competitive place to be building cars”.
He said: “We are in a competition, you have to compete. It is becoming more and more evident to me that manufacturing vehicles in high volume in the UK is not competitive. It is not a competitive location to be building high volume production these days.
It is energy costs, it is the cost of everything involved in the cost of labour, training. It is the supplier base or lack of. All sorts of different issues.
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