Warnings Nissan is on the brink of collapse follows a brutal few years at the carmaker, which has been battered by leadership chaos, strategy failings and fierce competition from Chinese rivals.
Like many global automakers, the Japanese giant is struggling in China where local manufacturers are gobbling up market share with affordable EVs and hybrids that boast advanced technology.
But Nissan’s bigger problem may be in the United States, where it lacks a credible line-up of hybrid cars in the face of growing consumer demand.
It is also fighting headwinds in a number of other markets including the UK, with senior executives voicing concerns about Labour’s stringent mandates for the manufacture of EVs.
Nissan said last month it would axe 9,000 jobs and 20 per cent of its global manufacturing capacity as it scrambles to reduce costs by $2.6billion (£2billion) in the current fiscal year amid a sales slump in China and the US.
The Japanese auto firm, which employs 7,000 people in the UK – including 6,000 at its flagship plant in Sunderland – has embarked on a huge cost-cutting programme after suffering heavy losses.
Chief executive Makoto Uchida is taking a 50 per cent pay cut and it has now been reported that chief financial officer Stephen Ma is stepping down.
Nissan’s former chairman, Carlos Ghosn, was famously smuggled out of Japan in a box in 2019 while awaiting trial for understating his salary and misusing company funds
But insiders fear it may not be enough, with the Financial Times quoting a ‘senior official’ at Nissan as saying: ‘We have 12 or 14 months to survive. This is going to be tough. And in the end, we need Japan and the US to be generating cash.’
Nissan’s pledge earlier this year to slash the cost of making its electric vehicles by 30 per cent reflects one of its biggest challenges: the growing popularity of ultra cheap EVs being made in China.
Chinese brands such as BYD, Chery, Geely and SAIC Motor have been enjoying a sales boom.
BYD, which stands for Build Your Dreams, recently bested Tesla‘s quarterly revenue, with revenue for the three months ending September 30 at $28.2bn (£22bn) – $3bn more than its American rival.
Nissan’s worldwide sales slumped by 3.8 per cent to 1.59million vehicles in the first half of the current financial year, largely driven by a 14.3 per cent fall in China.
This comes as the company racks up an ever-growing debit pile which could climb to as much as $5.6billion (£4.4billion) by 2026, according to reports.
The challenge from Chinese competitors coincides with Nissan’s self-acknowledged failure to adapt to changing consumer demand – most notably the growing popularity in the US of hybrid models.
The firm currently does not currently sell a plug-in hybrid model in the country – a notable contrast to its Japanese rivals Toyota and Honda.
Chinese brands such as BYD, Chery, Geely and SAIC Motor have been enjoying a sales boom
Nissan’s own CEO, Makoto Uchida, admits this has been a ‘lesson learned’.
‘We have not been able to keep up with the times,’ he told a press conference. ‘We weren’t able to foresee that hybrid electric vehicles and plug-in hybrids would be so popular.’
Compounding the carmakers problems has been the continuing fallout from the downfall of its former chairman, Carlos Ghosn, who was famously smuggled out of Japan in a box in 2019 while awaiting trial for understating his salary and misusing company funds.
Ghosn led the firm when it entered into an alliance with French rival Renault, but this was substantially scaled back following his arrest.
Renault is now further selling down its holding, which could leave the Japanese giant requiring cash backing from the Japanese or US governments over the next year to remain in business, the FT reports.
There have been suggestions that Nissan could strengthen ties with Japan’s second largest car marker Honda, which could buy a stake in the smaller firm – though sources described this as a ‘last resort’.
Nissan has a significant UK presence, with its factory in Sunderland considered a UK manufacturing success story since being founded in 1984.
It remains competitive in the country, and in terms of sales volumes it is the eighth most popular brand with 86,300 models sold up to the end of October.
Only VW, Audi, BMW, Kia, Ford, Mercedes and Toyota have sold more cars in Britain than Nissan this year.
Nissan’s bigger problem may be in the United States, where it lacks a credible line-up of hybrid cars in the face of growing consumer demand. Pictured is the Toyota Prius, the world’s most popular hybrid
This Qashqai (35,271 sales) and Juke (30,548), both produced at the Sunderland plant, are the third and fourth best-selling models in 2024.
However, Nissan recently voiced fears its ability to invest further in the country could be harmed by the government’s Zero Emissions Vehicles Mandate (ZEV), which forces firms to increase the proportion of EVs they sell each year until a total ban on new petrol and diesel motors in 2030.
This year, EVs must make up 22 per cent of a firm’s car sales and 10 per cent of van sales, with the threshold rising annually and makers facing a £15,000 fine for every sale beyond it.
Labour’s 2030 target is five years earlier than that set by former Tory prime minister Rishi Sunak.
Nissan warned last month that missing the target would lead to significant fines for manufacturers unless credits are purchased from EV-only brands – none of which produce vehicles in Britain.
The firm called for more flexibility on borrowing credits from future years and a two-year monitoring period for 2024 and 2025 instead of possible fines for car makers.
Guillaume Cartier, chairman of the Nissan Africa, Middle East, India, Europe and Oceania region, said: ‘It risks undermining the business case for manufacturing cars in the UK, and the viability of thousands of jobs and billions of pounds in investment.
‘We now need to see urgent action from the Government by the end of the year to avoid a potentially irreversible impact.’
MailOnline has contacted Nissan for comment.