Nissan's global restructuring raises concerns over South Africa's automotive future
As Nissan endeavors to streamline operations by reducing its global workforce by 20 000 on top of last year's 9 000 job cuts, concerns mount about the potential closure of its Rosslyn Plant, strategically located outside Pretoria.
Image: File: Timothy Bernard/Independent Newspapers
Banele Ginidza
Nissan's recent global restructuring initiative, known as Re:Nissan, has sparked widespread speculation about its far-reaching effects on South Africa's automotive industry.
The announcement comes amid a wave of employment cuts and factory closures, following the company's staggering R82.2 billion revenue loss for the fiscal year 2024.
As Nissan endeavors to streamline operations by reducing its global workforce by 20 000 on top of last year's 9 000 job cuts, concerns mount about the potential closure of its Rosslyn Plant, strategically located outside Pretoria.
The Re:Nissan strategy, also dubbed 'The Arc,' was unveiled last year as part of a broader plan to consolidate its 17 factories down to 10 by 2027, while also modifying its research and development programmes.
Under the guidance of CEO Ivan Espinosa, the objective is to claw back R61 trillion in fixed and variable costs by establishing a more efficient operating framework for profitability by fiscal year 2026.
Espinosa's candid assessment highlighted the high cost structure and volatile global market conditions that necessitate these changes.
Video Player is loading.
Play Video
Play
Unmute
Current Time
0:00
/
Duration
-:-
Loaded :
0%
Stream Type LIVE
Seek to live, currently behind live
LIVE
Remaining Time
-
0:00
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
Text Color White Black Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Transparent Semi-Transparent Opaque
Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps
Reset
restore all settings to the default values Done
Close Modal Dialog
End of dialog window.
Advertisement
Next
Stay
Close ✕
'The reality is clear. We have a very high cost structure. To complicate matters further, the global market environment is volatile and unpredictable, making planning and investment increasingly challenging,' Espinosa said in a statement on Nissan Japan's strategy.
Among the factories earmarked for closure are the Oppama and Shonan facilities in Japan, alongside additional plants in Mexico, India, and Argentina.
With the prospect of closing the Rosslyn Plant, which has been operational since 1966, the implications for the local job market are worrying, particularly following an initial cut of 400 positions in 2023 stemming from the cessation of NP200 production.
The Motor Industry Staff Association (MISA) on Monday said the announcement had not yet filtered through to its membership.
"MISA has not received notifications of possible restructuring in accordance with the provisions of the Labour Relation Act from Nissan, although as indicated, they might come from different dealership groups as was the case with Volvo Cars South Africa," MISA said in response to enquiries.
In contrast, Nissan's Re:Nissan strategy arguably offers a silver lining for South Africa's automotive sector, as evidenced by a recent R3bn investment aimed at modernising the Rosslyn Plant for new Nissan Navara model production.
This investment is projected to bolster capacity by 30 000 units per year and create approximately 400 new jobs, suggesting that despite potential setbacks, there was scope for growth and opportunity in the market.
The Re:Nissan plan also includes the introduction of new passenger vehicles, emphasising a shift from traditional bakkies to more popular segments like electric vehicles (EVs) and SUVs to the South African market.
This strategic pivot could bolster Nissan's competitiveness and market share, with ambitions to reach over 15% in South Africa, aided by government incentives such as the Automotive Production and Development Programme.
Industry experts assert that while Nissan's future plans signal a period of investment and growth, the anticipated closure of the Rosslyn Plant could still be devastating for its workforce, especially in light of preceding layoffs.
In 2022, the National Union of Metalworkers of South Africa (Numsa) picketed outside the Japanese Embassy in Pretoria over, in part, Nissan South Africa's failure to engage the union on Nissan EV Ambition 2030 Vision and the lack of transparency on the future of the South African Plant amidst challenges posed by 4th Industrial revolution.
Numsa demanded that Nissan follow the principles of a Just Transition as some workers were likely to be displaced because the new technology is not labour intensive.
BUSINESS REPORT
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
IOL News
36 minutes ago
- IOL News
Mr Price Group raises final dividend 12. 7% after market share gains in volatile consumer market
Mr Price Home store at Canal Walk, Century City. The group gained market share and sales in its 2025 financial year, with the faster sales momentum of the second half continuing into the first quarter of the 2026 financial year. Image: Ian Landsberg/ Independent Newspapers Mr Price Group increased its final dividend a creditable 12.7% to 593.5 cents a share after the value fashion retailer managed to raise its operating profit margin through lower markdowns, increased sales, and market share gains, after a muted first half. Total revenue increased by 7.9% to R40.9 billion, and the group gained 50 basis percentage points (bps) of market share, as measured by the Retail Liaison Committee. The gross margin expanded 80 bps to 40.5%, and operating profit reached a record level of R5.8bn, with the operating margin increasing 20 bps to 14.2%. Headline earnings a share increased 10.7% to 1 424 cents, respectively, after a stronger second half. This was despite the weaker month of February for the retail sector and the shift of school holidays and Easter to April, after the financial year-end, from March. 'The first half was challenging for the retail sector but improved in the second half. We are very satisfied to have gained similar levels of market share in both periods, reflecting the value we were able to provide our customers despite very different economic conditions,' CEO Mark Blair said in a statement on Friday. He said the sales momentum through the second half was supported by strong comparable store sales growth and gross profit margin gains across all trading segments. Revenue exceeded R40bn for the first time. Group retail sales of R39.4bn increased 7.8%, and comparable store sales increased 3.4%. In the second half, retail sales and comparable store sales accelerated to 9.9% and 5.7%, respectively. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Other revenue increased 6.6% to R1.3bn. Group store sales increased 7.8%, and online sales by 7.9%. Momentum improved in the second half across both sales channels, with sales growing 9.5% and 11.5%, respectively. Group unit sales increased 3.6% (4.9% in the second half), and retail selling price (RSP) inflation came to 3.7%. The group opened 184 new stores across its 15 trading chains, expanding its total store footprint to 3,030 stores. Interest rate cuts supported an improving credit environment in the second half, reflected in the group approval rate increasing to 20.3% and peaking at 23.8% in March 2025. Credit approvals would continue to be cautiously managed, the group directors said. Total expenses increased 10%, which included average space growth of 4.3%. The group's expenses to retail sales and other revenue ratio of 27.9% was within targeted range. On the outlook, Blair said a competitive and low-growth economy required the government reform agenda to be accelerated to create higher levels of employment and stimulate economic activity. He said the consumer environment in South Africa remains volatile. In the short term, consumer relief was supported by low inflation, lower petrol prices, and interest rate cuts, which collectively increased disposable income. Real wage growth experienced some recovery. However, the sustainability of an improving consumer environment in the medium term could be challenging due to the uncertainty from the global and domestic economies. He said Mr Price Apparel was the most shopped retailer in South Africa according to MAPS. Group retail sales in the first quarter of the 2026 financial year had increased 11.6%, with all trading divisions gaining market share in April 2025. 'Focus remains on extracting maximum value through profitable market share from our 15 trading chains and investment into strategic enablement projects, predominantly in the technology and supply chain functions,' said Blair. About 200 new stores would be opened in the 2026 financial year. Three acquisitions in recent years had delivered a combined operating profit of R1.2bn in the 2025 financial year and continue to be earnings accretive. BUSINESS REPORT Visit:
IOL News
6 hours ago
- IOL News
Why a medical report isn't enough for disability insurance claims
Discover the critical differences between employer medical boarding processes and disability insurance criteria as highlighted by the National Financial Ombud Scheme of South Africa. Learn how these distinctions can impact your disability claims. Image: Motshwari Mofokeng/Independent Newspapers A medical report does not automatically qualify an employee for disability insurance, according to the National Financial Ombud Scheme of South Africa (NFO). It said, while medical reports serve as key evidence, the employer's medical boarding policy may differ significantly from the criteria used by insurers to determine eligibility for disability benefits. The (NFO) describes itself as a single, one-stop, dispute resolution service made up of four former longstanding industry ombud schemes: the Ombudsman for Short-Term Insurance, the Ombudsman for Long-term Insurance; the Credit Ombud and Ombudsman for Banking Services. Services are provided free of charge. According to the NFO, medical evidence forms part of a broader application process that assesses the nature and extent of the disability, as well as the individual's ability to perform their duties, whether in their current occupation or an alternative role. The NFO says it regularly receives complaints from employees who have been dismissed due to incapacity or medically boarded by their employer, but later find their disability claims denied. 'The employee and the employer operate under the assumption that if the employer's doctor has declared the employee disabled for work, the insurer would pay his disability benefit. This is not correct. 'The employer's boarding or incapacity process and an application for disability benefits from an insurer in terms of the policy contract are two distinct processes,' says Denise Gabriels, lead ombud of the Life Insurance Division at the NFO. Gabriels highlighted two cases where employees were medically boarded but had their disability claims declined. In one instance, a Code 14 truck driver suffered vision loss in his right eye, undergoing multiple medical procedures. When he applied for income disability benefits through the group scheme's insurer, his claim was declined as it did not meet the policy's medical criteria. One year later, while still receiving specialist treatment, his employment was terminated due to ill health. His employer did not assist him with the claim process, instead advising him to appeal the insurer's decision. Under the policy terms, the driver needed to be classified as disabled under the Own Occupation clause, which meant he had to be unable to perform duties specific to his job. However, given his profession, the policy automatically referenced Any Occupation, meaning he had to prove that he was unable to perform any other role in the open labour market. Although the insurer acknowledged his inability to drive a heavy-duty truck, they deemed him capable of performing other tasks, including driving a light motor vehicle. His appeal was denied because he could still undertake alternative employment. Meanwhile, his employer terminated his services before the claim was finalised, without considering redeployment to a different role. The NFO stepped in, questioning whether it was reasonable to expect a 57-year-old truck driver with impaired vision to re-enter the labour market. Following further discussions, the insurer reconsidered and approved his claim. 'The NFO asked the insurer to reconsider its decision based on fairness and equity. Following further consideration, the insurer agreed to pay the claim. 'In deciding on disability claims, insurers have a responsibility to be fair and unbiased. The insurer should consider the individual's specific circumstances and attributes when assessing the risk,' Gabriels says. In another case, an underground load driver was medically declared unfit for his job due to a respiratory condition by an Occupational Medical Practitioner (OMP). When his claim for disability benefits was denied, he lodged a complaint with the NFO. His employer had found him unfit for underground work, could not offer an alternative position, and terminated his employment. However, the insurer noted that his respiratory pathology was mild, and while he was deemed unfit for underground tasks, no medical restrictions prevented him from operating the load driver vehicle. Following treatment, his condition improved, and he was no longer on chronic medication. His claim was declined as he did not meet the policy's strict criteria requiring a continuous, permanent, and total inability to work in his own occupation or a suitable alternative. The insurer considered a follow-up assessment that showed his medical condition was stable, his respiratory examination was normal, and his daily function was unaffected. Despite this, the OMP still declared him permanently incapacitated from underground work. His employer, unable to offer surface work, terminated his employment. The NFO ultimately ruled in favour of the insurer, concluding that while he was medically boarded, his medical evidence did not support total disability in terms of the policy. 'The availability of work within the mine and or in the open labour market is not a relevant factor in determining whether a person is disabled in terms of the policy. In this instance, the medical evidence did not support that the complainant was permanently unfit to work as a Load Driver or take up a suitable alternative occupation. 'The NFO could not assist this complainant, and the complaint was therefore dismissed,' Gabriels explained. These cases underscore the critical distinction between employer medical boarding processes and insurance policy criteria. Employees must understand that being medically boarded does not guarantee disability benefits under an insurance policy, she says. Gabriels says insurers assess claims based on contract definitions, which may differ from medical assessments. Alternative employment opportunities may influence claim decisions, even if the individual is unable to perform their current job. Employees should carefully review their policy terms and seek guidance if their claim is denied. With growing concerns over disability claims, the role of ombud schemes like the NFO remains vital in ensuring fairness and accountability in the insurance sector, she says. PERSONAL FINANCE
IOL News
7 hours ago
- IOL News
Mr Price hits milestone with 3,000 stores despite anaemic economic outlook
Mr Price Home store at Canal Walk, Century City Image: Ian Landsberg/Independent Newspapers JSE-listed Mr Price Group demonstrated the resilience of its fashion-value business model, posting a 7.9% increase in total revenue to R40.9 billion for its 2025 financial year. In its results statement issued on Friday, Mr Price said it reached a milestone of now having just more than 3,000 stores during the full year, as it opened 184 new stores across its 15 trading chains. Weighted average trading space increased 4.3%. However, Global economic uncertainty has cast a shadow when it comes to growth prospects in 2025, as potential US tariffs threaten markets worldwide, it said. 'The South African economy has not been spared from this impact and its forecast gross domestic product growth has been revised downwards from the previously bullish outlook at the end of 2024,' the group noted. It added that South African consumers have received some short-term relief through lower inflation, decreasing fuel prices, and interest rate cuts totalling 1 percentage point, all of which contributed to increased disposable income, Mr Price said. It added that, while real wage growth is showing signs of recovery, the sustainability of these improvements remains questionable given both global and domestic economic uncertainties. Despite these challenges, Mr Price remains focused on its fashion-value merchandise strategy, which continues to resonate with its growing customer base. The retailer maintains its position as South Africa's most shopped clothing store according to MAPS data, reinforcing its commitment to being the "customer's value champion" even in volatile times. The retailer gained 0.5 percentage points of market share according to Retailers' Liaison Committee data, while expanding its gross margin by 0.80 percentage points to 40.5%. The group achieved a record operating profit of R5.8bn, with its operating margin increasing 20 basis points to 14.2%. Basic and headline earnings per share grew 11.0% and 10.7% cents respectively. Its second half performance was particularly strong, with diluted headline earnings per share growing 12.1%, it said. This came despite February's weaker retail performance and the shift of school holidays and Easter from March to April, Mr Price noted. Mr Price attributed the improved performance to better sales momentum and lower markdowns following a more subdued first half in the retail sector. Group CEO Mark Blair said that, while the first half presented challenges for retailers, conditions improved in the second half. "We are very satisfied to have gained similar levels of market share in both periods, reflecting the value we were able to provide our customers despite very different economic conditions," he said. Blair added that growth in sales momentum through the second half was supported by strong comparable store sales growth and gross profit margin gains across all trading segments. The board declared a final dividend of 593.5 cents per share, up 12.7%. IOL
