Nissan Motor Company recently published its latest financial report and things are still looking rough, with the company anticipating losses as high as $5.3 billion in total for the 2024 fiscal year. The latest figures, which are equivalent to around 700 to 750 billion yen, surfaced after Nissan executives reassessed its 2024 financial performance with an adjusted report. Previously, initial estimates suggested Nissan could lose as much as 80 billion yen. However, the situation is far worse than anticipated.
According to Reuters, the new adjusted figures could result in the company’s biggest loss in the entirety of its history. The Yokohama-based automaker came into the spotlight late last year after the company published its 2024 year-end sales report, which initially revealed its bleak financial forecast. Alarms then began sounding, both from Nissan itself and among industry analysts, triggering Nissan to hunt for a new collaborative partner so it could ditch its current alliance with France’s Renault.
The Company’s Biggest Financial Loss Comes Just As It Appoints New CEO
Nissan’s been having a rough time financially after over a decade of mismanagement and supposed embezzlement from former CEO Carlos Ghosn. Since Ghosn left the company and fled Japan to avoid prosecution for his alleged crimes, the Japanese auto giant has been trying to right all that was wronged. But it’s been having a helluva time trying to do so.
In addition to suffering from financial losses incurred by the former mismanagement and slow sales, the company has struggled to turn a profit from lackluster products and not being able to compete with some of its rivals. Adding salt to the wound was the fact that its lineup was in dire need of an overhaul, which required a major increase in spending to further invest in the redesign and development of new models.
Nissan’s also been a major innovator in the electric vehicle space. Having further invested in the development of some new EV models, the return on those investments hasn’t been as strong as expected, mainly due to the recent and ongoing EV market slowdown.
Nissan also got so desperate, it shocked the industry by attempting to merge with Honda and join forces with one of its key rivals, with the intent of leaving its two-plus-decade alliance with Renault. However, even after reaching the negotiation stages with a “memorandum of understanding,” which also included Mitsubishi, the merger failed.
Despite the failed merger, Nissan said it remains committed to working with Honda on multiple collaborative fronts. The reason for the merger failure also came down to disagreements with former CEO, Makota Uchida, who recently stepped down amid internal pressure from other executives and shareholders.
Taking Uchida’s place is long-time Nissan executive, the company’s now former chief product planning officer, Ivan Espinosa, who many believe has the passionate “car-guy” vision to help dig Nissan out of its financial rut. With the appointment of Espinosa as Nissan’s new CEO, Honda is reportedly still open to the idea of merging with Nissan.
However, despite the major losses, Nissan said in its statement that it remains in a “solid cash position” with a net cash reserve totaling around 1.498 trillion yen, or about $10.5 billion.
“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,” Espinosa said in his official statement. “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.”
TopSpeed’s Take
Nissan is still reeling in from its terrible, no-good, and very bad 2024 year. But despite the alarming financial reports, the automaker says it still has enough cash to fund its restructuring and continue funding future product development. After the failed merger with Honda, many cited poor leadership as the continuing cause of Nissan’s downward trend. But with a new CEO at the helm, there’s a chance it may be able to save its sinking ship.
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