Despite predicting a rough year for itself long before the pandemic kicked the whole industry in the shins, Nissan is reporting a sunnier financial forecast. Thanks to its vast restructuring efforts and better-than-anticipated sales, the Japanese automaker has trimmed estimated annual operating losses by 28 percent.
According to Nissan, that should place the 2020 cash bleed (which doesn’t officially wrap until March 31st, 2021) somewhere around $3.2 billion instead of the original $4.5 billion. Considering it’s coming off an already bad year, this is actually good news. But it doesn’t mean there aren’t more hard times ahead, as Nissan has decided to evolve its restructuring plan to make sure it doesn’t lose more money than absolutely necessary.
Translated from yen, the July-September quarter saw the firm reporting an operating loss of $45.6 million. This time last year Nissan was making $285 million but the pandemic lockdowns likely made anything approaching that an impossibility in 2020. Sales declined by 27 percent, year-over-year.
CEO Makoto Uchida said the company could expedite its recovery phase by bolstering its restructuring efforts and said he expected Nissan to return to profitability sometime in 2021. While great news for shareholders, this means the 12,500 job cuts announced in 2019 are now 14,000 strong.
The company also seems poised to pull out of the European market (leaving it to Renault) while it focuses on improving sales in China and the United States. This comes while it’s also hoping to freshen the lineup with a dozen new models — though some are just heavy refreshes — and lower incentive spending. During Thursday’s presser, COO Ashwani Gupta also noted that the company was interested in embracing a global online sales model. COVID-19 hasn’t been particularly kind to retailers and the industry seems keen to get dealers out of the picture so it can start charging consumers a haggle-free price that’s probably closer to sticker than invoice.
[Image: FotograFFF/Shutterstock]
There’s no point to cutting cost when the product is substandard. Toyota is trying to make products people want, while still watching expenses continually. Sell more and all your problems go away.
More job cuts – not great news, but if it’s in regions they plan to abandon, then it makes sense.
“The company also seems poised to pull out of the European market (leaving it to Renault) while it focuses on improving sales in China and the United States. This comes while it’s also hoping to freshen the lineup with a dozen new models — though some are just heavy refreshes — and lower incentive spending. During Thursday’s presser, COO Ashwani Gupta also noted that the company was interested in embracing a global online sales model.”
Very bold moves, especially the online sales model. That will rock the automotive world.
“…a haggle-free price that’s probably closer to sticker than invoice.”
If a dealer isn’t involved, then there is no invoice. Haggle-free pricing doesn’t mean prices will go up, because each mfr still has to compete to sell vehicles. If Nissan is stupid enough to raise prices this way, then consumers can always buy another brand.
Fact is, eliminating the dealers is what allows Tesla to trim costs. If anything, dealers *add* costs; the million-dollar air-conditioned lounge with coffee and cookies isn’t charity from a local businessman.
My GM dealer offers donuts with coffee! ;-)
The big plus here could be the online sales model. Potential car buyers hate the traditional sales process so much-they could buy vehicles this way that may not be competitive as others. I don’t believe it’s a quality thing-as much as Nissan products have lagged behind in features and style.
How about making quality products that people want to buy. Nissan use to make vehicles just as good as Toyota and Honda but ever since Renault they have gone down hill. Nissan quality has reached the quality levels of Fiat and the former Yugo. Raising prices for poor quality is not a formula for success.
So much dislike of Nissan here. Most based on their JATCO CVT. Yet each time I have asked I have not received an answer as to whether these problems have been addressed in newer models.
Having worked with CVT’s longer than most other manufacturers and therefore having more experience with them, has Nissan not learned and improved their CVTs? Are the complaints in regard to older models/versions.
And most other manufacturers are switching to or using CVTs. So the prejudice against them here seems much like our prejudice in favour of manuals. Engrained based on stereotypes or outdated information.
I am going to admit that we have a leased Rogue. Leased rather than purchased primarily because of my initial mistrust of owning a CVT equipped vehicle. After 3.5 years, we still really like the Rogue. And have averaged 7.8 litres per 100 kms (30.15 mpg) in combined driving including with dedicated winter tires.
Considering the ‘appointments/options’, cabin space and Nissan’s very comfortable seats, the fact that it was considerably less expensive than a RAV4 or CRV makes it in my estimation very competitive.
7.8 l/100km? That’s an average 36 mpg Imperial, which is what my old Subaru LGT and my Mazda6 turbo average on the highway on cruise control and 115 to 118 km/h. At a steady 60 klicks, the Mazda gets about 6.0, so I assume your driving is mostly outer suburban, no traffic jams and a huge helping of luck.
I quote from Car and Driver on the 2019 Rogue review: “However, the anemic gas-powered Rogue — we haven’t tested the hybrid — proved less economical than advertised during our real-world 200-mile highway fuel-economy test, delivering only 28 mpg despite its rating of 32.”
28 mpg US at 75 mph over 200 miles is 35 mpg Imperial real gallon or 8.4 l/100 km. I guess you got the good one, Arthur, if your combined is better than that. Fuelly.com averages about 9.4 on the Rogue.
Sounds like a honey of a drive:
https://www.caranddriver.com/nissan/rogue-2019
Never has been used to tow. Rarely driven with a ‘load’. Nearly always on ‘Eco’ mode. Usually driven with a ‘light foot’. More than half the driving has been on Highway 407 at a steady 114kms. And its a ‘base model’ with FWD.
The mileage is based on the tracking readout. Not using a pad and paper. According to it, the best we have done in one trip was 5.8 litres per 100 kms.
From the linked article: ‘The EPA rates the Rogue among the most fuel efficient in its class. The front-drive model has estimates of 26 mpg city and 33 highway, ‘
Glad you like your Rogue but I will pass on any Nissan. Toyota has a CVT and so does Honda but both have not experienced the problems that Nissan has with them. If I wanted to save some money I would pick a Hyundai or Kia instead.
I will vouch for our Kia. Well liked by every member of our family.
Have experienced ‘mixed results’ with our two Hyundais.
As for the lease deal, the Rogue was still considerably less than the competing Hyundai/Kia and in a totally different ‘classification’ than the competing Toyota, Honda or even GM product(s).
Which I found strange as generally the ‘residual’ value impact on the lease cost should have favoured the Toyota and Honda.
@Jeff, but as I keep asking is that recent experience or issues with their early CVTs? Which they used long before Toyota or Honda.
Everyone seems to keep harping on these early CVT issues but what about the new ones?
It is like those who use the following tropes:
Won’t buy a Ford due to 1970s rust issues.
Won’t buy a GM due to Dexcool.
Won’t buy a Chrysler due to transmission problems.
Wont’ buy a Toyota because of sludge.
Won’t buy a Honda because of auto transmissions.
Won’t buy a Mazda because of rust.
Won’t buy a Subaru because of ball joint boots.
Won’t buy a Hyundai because of the Pony.
Won’t buy a VW because of self destructing exhausts.
Won’t buy an English vehicle because of Lucas.
Won’t buy a Fiat because.
Are all of those still problems? Or are we just prisoners of past prejudices/issues?
I won’t buy a Nissan until they become less dependent on Renault and the Japanese have more control. The only Nissan I would have considered would have been the 2019 and before Frontier with a manual and a 4 cylinder. When Nissan was all Japanese they were just as good as Toyota and Honda. I hope you have good luck with your Rogue and if I were to get a Nissan it would be a lease as you have. I keep my vehicles a minimum of 10 years with one that I kept for over 20 years.