The last few years have certainly been interesting for Nissan. After clawing its way back from financial disaster in the early 2000s, the company endured one of the most high-profile and scandal-ridden management shakeups in automotive history by 2018. It also became desperately unprofitable while incurring negative growth, with the remaining leadership deploying an aggressive restructuring plan designed to help get the business back on track.
Those efforts appear to have been successful.
Nissan is back in the black and turning a profit for the first time in three years, according to CEO Makoto Uchida and a report from Automotive News.
Over the last fiscal year, ending on March 31st for Nissan, the company showed operating profit pitching up to 247.3 billion yen ($2.03 billion USD). However, Uchida’s targeted 5 percent operating profit margin will take a little longer to achieve. Nissan only managed a 2.9 percent margin for 2021. Though it’s still a major step in the correct direction and ultimately good news for the manufacturer, as the year’s mid-term revival plan only called for 2 percent.
Uchida staked his job on a successful turnaround in 2020, mimicking the actions of the now-defamed Carlos Ghosn from 1999. Though, while the former CEO is now living on the lam in Lebanon, Nissan’s current boss is still hoping to appease shareholders. During the announcement of the company’s financial results, Uchida confessed that his job was far from finished.
From Automotive News:
Uchida unveiled his Nissan Next mid-term plan in 2020, focusing on cutting fixed cost, trimming production capacity, launching new product and improving revenue per vehicle. The campaign wraps up in the fiscal year ending March 31, 2024, but Nissan is ahead of plan by many measures.
Nissan has cut global capacity 20 percent, trimmed the number of nameplates 15 percent and slashed 350 billion yen ($2.87 billion) in fixed costs. COO Ashwani Gupta said the rationalization phase of the comeback plan is complete, and Nissan is focused now on growth.
Uchida and Gupta took the reins at Nissan in late 2019 while the company still reeled from the arrest and ouster of longtime leader Ghosn and frayed relations with French partner Renault.
The resulting fallout had seriously tarnished the brand’s image. But it had also become plagued with quality control issues and maintaining production schedules (like the rest of the industry) as global sales volumes pitched downward. These were all things Nissan had hoped to fix during its restructuring phase but not before it endured its worst-ever operating loss in 2020.
Fortunately, the automaker just rebounded with an annual net income of 215.5 billion yen ($1.77 billion), flipping last year’s financial forfeiture of 448.7 billion yen ($3.68 billion). Sales improved 2 percent (YOY) to 1.18 million units in North America. However European volumes declined 13 percent to just 340,000 vehicles. Nissan’s largest market, China, also declined by 5 percent — resulting in 1.38 million deliveries.
Despite reforming itself into a profitable business, headwinds will persist. The rising price of raw materials is going to make it harder for all automakers and Nissan acknowledged that last year’s earnings were helped immensely by selling its entire stake in Daimler. This has led the company to forecast relatively meager improvements for next year’s report. Nissan is estimating operating profit to advance by 1.1 percent to 250.0 billion yen ($2.05 billion), while its net income is likely to decline. Meanwhile, global revenue is assumed to grow by 19 percent to 10 trillion yen ($82.03 billion) for 2022. Total sales are also anticipated to climb by 3.2 percent, resulting in some 4 million deliveries by the end of March 2023.
[Image: Memory Stockphoto/Shutterstock]
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the secret to Nissan’s success:
junk sells when good cars can’t be had
Their stuff is actually getting quite a bit better.
The wife’s 2020 Kicks is turning out to be a very nice car. She’s quite happy. And no, we’re not planning on keeping it for 11+ years and driving it until it finally dies.
not valid these days, but when i retire i think a lease would be a good chance to swap out cars every 3 for variety
The new Pathfinder seems to be a decent effort. They are number three in the class with the Rogue. With those points being made-the rule of thumb currently is-
That if you have cars on the lot you will sell them!
They lost the truck wars and the Titan is on death watch. The numbers are not enough to sustain it.
Good to see this news, but “we are at the starting line” is a correct assessment of their status.
The Frontier seems to be doing good and the new Z should spur some interest. Need to replace those Jatco CVTs with a more reliable transmission if Nissan wants to have any more success selling their cars and crossovers.
Being that the industry seems to have discovered that selling fewer cars without stacks of cash on the hood is more profitable I think this is the new normal. Don’t worry, you’ll still be able to get what you want…it’ll just have a 15 year mortgage.
Which is why this chip shortage is only an issue for the consumer. The automakers love it and want it to continue.
c’mon – not everything is a complex conspiracy. please….
Everything I do not want to believe is a complex conspiracy.
I was thinking that all of the rental agencies needed to build up their fleets again!
I do not see bright future for Nissan. It is 2022 and they still cannot manage to make half decent EV.
It seems they have made a better than half decent EV, and the Leaf remains a top seller. Apart from that, sure.
Leaf? That’s a garbage. I do not see any Leafs here in Bay Area.
Automakers are making a lot of money right now? I was told the chip shortage was hurting auto makers. How can this be??
It’s simple (math). “Mass Production” is totally dependent on huge volumes. Selling at full MSRP or even 10% over, doesn’t make up for lost volume, even 10% off pace.
No one understands that F-series is only (staggeringly) profitable from insane volume, usually. People expect all pickups to be wildly profitable just because of the pickup bed, when in reality it takes intensive amounts of parts, labor, machinery, real estate, buildings and various other logistics, compared to a typical printed copy, sedan, CUV or other.
DenerMike-before COVID there were $10,000.00 to $12,000 discounts off MSRP during truck month-I know I bought one with one of those discounts. That would seem to suggest there is some degree of profitability that justify discounts by the dealers -that the manufacturers provide.
“No one understands that F-series is only (staggeringly) profitable from insane volume, usually. ”
Not at all true. Ford was making money when they had $10k on the hood and larger volumes. Now they are still making massive amounts of money with severely lower volumes selling at MSRP.
The same is true for all other automakers.
That is the reality. Don’t like it? Start your own car company. They exist to make money…not to make sure you can afford a car, There is used or the bus if its too rich for your blood.
Don’t recall anyone commenting on this article saying that they wanted to start their own car company. Once had a Great Uncle that built his own car during the Depression out of junkyard parts. As for the bus Art have you ever ridden on a bus? What was your riding experience on the bus? I have for many years on the Park & Ride. As for affordable new vehicles I will leave that to the Chinese since the market is wide open for more affordable options.
If it just came down to MSRP, Ferrari and Lamborghini would be among the most profitable brands.
But it’s not just about diminished sales. Consider all the vehicles Ford did build, the latest count is over 50K units, that are sitting awaiting chips.
“If it just came down to MSRP, Ferrari and Lamborghini would be among the most profitable brands.”
Now you are changing the argument. You asserted that the only reason the F-Series is profitable is because of volume. If I sell 1 million trucks at a loss, I’ve still incurred a loss.
Not to mention, I think we are conflating if the program is profitable vs an individual unit.
The program is profitable because of volume (but a much lower volume than what they sell), but we are clearly seeing that Ford is capable of making billions on a severely reduced volume. Volume is not that important.
Volume is absolutely everything. Plus you’re forgetting the F-series, normally billions in straight profit annually, is exactly what keeps Ford afloat. If the F-series was it’s own brand, hell yeah it’d be a different story. But it’s the total of F-series (mega) sales.
Each truck becomes cheaper to build with every one that’s built. Figure the first truck (down the assembly line) of every new generation would need to sell at several billion dollars MSRP to recouped all expenses, if it was the only one built.
Toyota can’t live off of the Tundra, not even close, on a good year or whatever, and it’s a pickup just like the F-150. Include the Tacoma if you want. So what’s the biggest difference?
So we pay an extra 15 to 65 percent for cars and trucks. So we pay an extra 10 to 30 percent for food. So we pay double for energy. At least there are no mean tweets. And as a bonus we get record high crime and millions of illegal aliens to provide free housing, education and welfare for. Seems like a good deal to me.
You do know the President isn’t personally the free market, right?
Veeg, don’t let facts get in the way of a MAGA argument.
Good point.
I probably shouldn’t expect coherence from people who thought an NYC real estate mogul/illiterate game show host was for the working class.
Fun fact: The Roosevelts (including Teddy and FDR) made their fortunes in New York real estate as well.
@ Matt Posky… New York Real Estate is where Donald Trump’s father made Donald’s fortune for him.
yawn. gonna suck to be poor in the coming years…I mean more than it normally sucks even.
Wow, kc, I had no idea Nissan caused all that.
@Matt Posky do you have any examples in the last 80 years?
Also I notice you ignored the illiterate game show host part. I assume you have no examples on that one besides The Orange Imbecile.
Well, he lost soooo….
I like that the Orange Imbecile but I doubt he is an imbecile more like a charlatan.
“ At least there are no mean tweets. And as a bonus we get record high crime and millions of illegal aliens to provide free housing, education and welfare for. Seems like a good deal to me.”
Right? Now all we get are those things you mentioned and completely false tweets from the White House. Gotta love it.
The late night comedians do miss those late night tweets of Trump as he is sitting on the can. Never was that upset about Trump’s tweets as much as his actions and his closeness to Russian oligarchs who have lent him a sizable amount of money.
Lol. They’re still butt hurt.
I have an 09 Altima closing in 200K. No issues other than the CVT, which was replaced under warranty with about 2000 miles to spare on the 120K warranty. I wouldn’t buy another car with a CVT, both due to my perception of its longevity and I don’t like the dynamics of how they drive. Most of my driving is with just me in the car but the way the CVTs don’t coast is a strange sensation when you are the passenger in the car. I’m not sure how they can compete if others use a traditional proven auto transmission.
CVTs are absolute garbage. They are garbage on lawn tractors and garbage in vehicles.
theyve been working pretty well in scooters the past 40 years. super easy to work on compared to a motorcycle 6spd. engine doesnt need to be split either
The CVTs on the Toyota Corolla and Honda Civic seem to be reliable it is mainly the Jatco CVTs that are in the Nissans. Don’t have anything against a good CVT Ford had a decent CVT on the Ford 500 and Mercury Montego.
Before ICE dies, I would like some GTR.
Maybe you should buy one before they stop making them.