Major car brand's new boss admits problems started ‘years ago' as firm plans to slash nearly half its factories
THE new CEO of a major car manufacturer has admitted the struggling brand's problems began "years ago."
Under the previous CEO the brand struggled to keep afloat and the new boss has responded by cutting jobs worldwide.
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Nissan's new CEO, Ivan Espinosa, has now admitted the problems began years ago as he aims to make a u-turn and put the company into recovery.
In a shock revelation Espinosa admitted that the company's troubles started a decade ago.
The initial wrong step, according to the CEO, was Nissan's optimistic goal of selling 8 million vehicles a year.
According to some data however the company is a far cry from reaching that 10-year-old goal with only 3.3 million sold in Japan's fiscal year 2024.
Espinosa said: "'Let me start by explaining why we are here. This is not something that happened in the last couple of years.
"It's more of a fundamental problem that probably started back in 2015, when management thought this company could reach [annual global vehicle sales] of around eight million.
"There were heavy investments both in terms of planned capacity as well as in human resources, but the reality today is we are running at around half that volume. And nobody did anything to fix that until now.'
Espinosa said the overoptimistic goal resulted in the company ramping up production and expanding its workforce to meet an overly ambitious target.
The brand's new CEO said this was the cause of their problems which have led to 20,000 jobs being cut and billions of pounds in losses.
Espinosa is confident that Nissan can bounce back from the recent struggles however.
He aims to strengthen ties with fellow auto manufacturers Renault, Mitsubishi and Chinese ally Dongfeng.
Espinosa is not opposed to letting Dongfeng build cars at Nissan's UK factory in Sunderland.
The Sunderland site does not currently face closure but seven others are staring down the prospect.
Nissan also aims to cut costs under its new CEO with factory closures and job losses.
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Despite the turmoil Nissan is slated to bring more than ten new models to North American roads soon.
In Europe the next generation of Nissan Micra is planned to be introduced.
And in Japan a new generation kei car is due to come to the roads along with an all new Skyline.
The troubles faced down by the Japanese car giant resulted in the development of several models being halted.
Nissan reported that it would shut almost half of its factories by 2027.
The reduction would bring down the car giants factory numbers from 17 to just 10.
The struggling brand also cut its workforce by 20,000 with around 15% of its staff hit.
Last week Japan's third largest car maker announced a net loss of 671 billion yen over the last financial year.
Nissan's gloomy future
Last year the company lost around 427 billion yen ($2.88bn) this means since March 2023 Nissan has had a net loss of almost 1.1 trillion yen ($4.11bn).
The company hopes to make a dramatic u-turn and become profitable again by 2026.
Massive cost saving cuts have been made in an attempt to reach this goal with factories closed and jobs slashed.
Speaking last week Nissan president and CEO Ivan Espinosa said: "In the face of challenging FY24 performance and rising variable costs, compounded by an uncertain environment, we must prioritise self-improvement with greater urgency and speed, aiming for profitability that relies less on volume.
"As new management, we are taking a prudent approach to reassess our targets and actively seek every possible opportunity to implement and ensure a robust recovery.
"Re:Nissan is an action-based recovery plan that clearly outlines what we need to do now.
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