By on December 27, 2019

With sales and profits nowhere near where it would like them to be, Nissan is reportedly clinging to every penny in its possession. Following an earlier report of a two-day furlough of U.S. staff scheduled for the first week of the new year, Reuters reports that savings will now be achieved wherever the company can find them.

Don’t expect to see many executives or staff winging their way across the globe in the coming months.

According to three internal sources, costs are being slashed across the board, with travel, sales incentives, and promotional events topping the list of non-essential expenses. The automaker reportedly plans to “conserve every yen” it can, a source said.

The penny-pinching effort will be especially intense in North America, the report claims, as that region has seen the steepest drop in sales. Nissan Group’s U.S. volume fell 15.9 percent in November, year over year, with sales through the end of last month falling 7.8 percent short of last year’s year-to-date tally.

Globally, Nissan Group sales fell 10.3 percent in November, with YTD volume down 8 percent.

From Reuters:

Meetings that three or four people would once have traveled to attend in person, might now only have one Nissan representative, the sources said, while other gatherings and dinners have been canceled altogether or replaced by video-conferencing.The extensive spending cuts come in tandem with Nissan’s decision this month to order a two-day furlough for U.S. employees Jan. 2-3. There is also an effective travel ban for staff in the United States, where sales have been particularly hard hit, one source said.

While the company is in no danger of going under, thanks to considerable cash reserves, one source did remark, “The house is not on fire, but there’s something smoldering.”

Last month, the automaker announced a 70-percent drop in operating profit during the previous quarter. The newfound cost-cutting effort will continue to the end of the financial year in March, sources claim, though it’s likely to remain in place after that point.

As pressures mount on the company, both from falling sales and the ongoing disruption to its corporate hierarchy born of the 2018 arrest of former Chairman Carlos Ghosn, Nissan’s stock has taken a serious tumble. This week’s announced departure of vice chief operating officer Jun Seki, a man tasked with helping to turn around the struggling automaker, did nothing to add buoyancy to the company’s share price.

[Image: Nissan]

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12 Comments on “Triage Time, Part II: Nissan Doubles Down on Cash-saving Efforts, Report Claims...”


  • avatar
    pale ghost

    If Ghosn was stealing as they allege, looks like whatever he was pilfering was worth it.

    • 0 avatar
      Sceptic

      The man was worth his weight in gold. Those racist japs made a serious mistake sacking him.

      • 0 avatar
        bd2

        Hardly.

        Nissan’s current sad state of affairs is the after-effect of Ghosn’s disastrous policies (chasing sales volume, cost-cutting and starving investment/R&D for new products and components which didn’t suck – like Nissan’s CVT).

  • avatar
    thelaine

    Meh. Much ado about nothing.

  • avatar
    EX35

    Easy solution — make better cars and trucks. We own a new armada which is pretty fantastic but it’s one of the few (only?) nissans made in Japan. All their US built stuff seems crap to me.

    • 0 avatar
      redgolf

      EX35 – People also ask
      Is the Nissan Armada reliable?
      The Armada is an OK SUV. It’s powerful and relatively agile, and it has an upscale cabin as well as a good predicted reliability rating. However, its ranking among large SUVs suffers because most rivals have better fuel efficiency, larger cargo areas, and more modern technology than this Nissan.Sep 6, 2019

      Just OK? reminds me of the tv commercial – about the doctor( Dr. Francis) going to operate on a patient – “just OK is not OK – https://www.youtube.com/watch?v=1YT3erQZoq4

      • 0 avatar
        EX35

        I test drove all it’s competitors and we found the Armada the smoothest, quietest, and most solid feeling of its competitors. Yeah it’s fuel economy sucks (I don’t care) and slightly smaller cargo area, but it felt much better screwed together than the american competitors. The fact that it was built in Japan was a plus. Every Japan-built vehicle I have owned (8 of them) have been flawless.

      • 0 avatar
        AA610

        This is one of my favorite commercials. “Guess who just got reinstated!”

  • avatar
    Jeff S

    Does Nissan think cost cutting is going to make them more profitable when their products are among the worst in quality and reliability? If anything Nissan’s quality will get worse if they buy even cheaper parts. Just hearing this would be enough for me to steer away from any of their products which for the most part I wouldn’t consider any of their products except a manual 4 cylinder Frontier because I don’t trust their automatic transmissions even their non CVTs.

  • avatar
    Jeff S

    Does Nissan think cost cutting is going to make them more profitable when their products are among the worst in quality and reliability? If anything Nissan’s quality will get worse if they buy even cheaper parts. Just hearing this would be enough for me to steer away from any of their products which for the most part I wouldn’t consider any of their products except a manual 4 cylinder Frontier because I don’t trust their automatic transmissions even their non CVTs.

  • avatar
    schmitt trigger

    “The lashings will continue until morale improves “

    I have never seen that castigating your workforce will permanently improve the LONG TERM financial health, unless a serious parallel effort is done to correct the systemic issues that got you into hot water in the first place.

    Which means: designing and building autos that people would want to purchase.

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