Nissan is closing plants, realigning production and trimming models in an effort to cut $2.79 billion in fixed costs to bolster the bottom line. The plan banks on fresh product, such as the redesigned Sentra sedan and Rogue crossover, increasing net revenue per vehicle.
But the plan fights against a nosedive in sheer volume.
Nissan expects its global sales to fall 16 percent to 4.13 million vehicles in the fiscal year ending March 31, with a 24 percent drop-off to 940,000 vehicles in the U.S. The result is expected to be a 22 percent decrease in global revenue and the massive operating and net losses.
Nissan’s operating loss is expected to balloon to $4.38 billion in the current fiscal year, from $377.1 million the previous year.
A net loss is expected at $6.24 billion, on par with last fiscal year’s loss of $6.25 billion.
But Gupta said there are signs of improvement in the U.S. market, now forecast to account for 23 percent of Nissan’s worldwide sales this year.
The Nissan brand’s share of the U.S. retail market, for instance, climbed from 4.9 percent in April to 5.4 percent in June, although this year’s penetration is still below its level a year earlier.
And net revenue per vehicle for the Nissan brand in the U.S. increased by $700 over the previous year’s fiscal first quarter, driven partly by interest in the redesigned Sentra and Versa sedans and the Titan pickup.
Gupta pointed to Nissan’s success in the J.D. Power APEAL Study released in July as evidence that the brand’s image is changing among consumers. The Automotive Performance, Execution and Layout Study measures excitement and emotional attachment to new vehicles. The Versa was the highest-ranked small car, and the Sentra was the top compact — edging such stalwarts as the Honda Civic and Volkswagen Jetta. The Maxima was best in class among large cars, while the Armada outranked the GMC Yukon and Chevrolet Tahoe to take top honors in the large SUV category.
“It means customers as well as rating agencies have started trusting our products and technologies,” Gupta said. “While the impact of COVID-19 remains challenging in the United States, we see a steady recovery and contribution from the U.S. in our quarterly financial results.”
