Nissan Thinks Recovery Could Begin in Q4 of 2020; Leadership Plots Turnaround
We’ve documented Nissan’s troubles for some time, breaking the situation down into numerous articles expanding upon the various elements that left the brand proclaiming this year’s financial performance will mirror 2019’s lackluster showing months ahead of the latter period’s scheduled reporting.
Everything seemed to go wrong for the company, forcing it to embrace aggressive cost-cutting measures to say afloat. U.S. sales were particularly horrendous going into the pandemic, which only added to the mounting list of hardships. Nissan is now predicting 2020 will be one of the worst financial periods in its history.
However, CEO Makoto Uchida predicts 2021 will be the point where the company finally turns a corner and begins its ascent toward sustained profitability. In fact, he believes that, with a little luck, the rebound might even begin in Q4 of this year. But that unbridled optimism is being tempered by COVID-19. Uchida worries the dreaded “second wave” could forestall Nissan’s recovery by several months.
AutoNation Ending Aftermarket Collision Parts Division - Shrewd or Crude?
AutoNation’s collision parts division is scheduled to be eliminated by the end of 2020, freeing up some cash after the two-year endeavor proved less than profitable.
Former CEO Cheryl Miller had made it clear that one of her main goals for the company was to ramp up services in an attempt to enhance revenue and diversify the business. But this tactic has proven perilous for the automotive industry at large, often offsetting opportunities to make money with sizable financial risks.
Mobility is probably the best example of this, as its broad enough to encompass everything from self-driving vehicles to subscription models and relies on the market maturing into something that will presumably see returns on investment years down the line. However, AutoNation’s diversification was far more traditional. It seemed like a sure thing, since the collision parts business was forecast to grow over the next five years. In fact, despite being the the largest automotive retailer in the United States, the company actually owes 46 percent of its gross profit to parts and service. Selling cars (both new and used) only accounts for 24 percent — with the rest coming from finance and insurance.
Jaguar Land Rover Now Targeting $3.3 Billion in Cuts
Jaguar Land Rover has increased its savings target for the year to $3.3 billion (£2.5 billion) following a $540 million (£413 million) pre-tax loss for the quarter ending in June. Losses are hardly uncommon within an industry shaken by the pandemic, but JLR went into this year already confronting an uphill battle.
In 2019, the company was deep in the midst of a restructuring plan aiming at $2.5 billion in life-sustaining savings. Unfortunately, the move required the elimination of thousands of positions as it tried to imagine the effects of Brexit and contend with falling sales in its largest markets. That includes China, which the firm assumed would offer continued growth in the months leading up to coronavirus’ big debut and increasing political tensions between the Communist Party of China and United Kingdom.
Mitsubishi Puts Europe on Ice
Living in Europe and eager for the next generation of Mitsubishi products? You might end up waiting forever.
As part of a crash cost-cutting exercise designed to stabilize the storm-rocked company, the Japanese automaker has decided to reduce investment in under-performing markets while chopping fixed costs by one-fifth over the next two years.
In Europe, the brand could soon become a ghost. Mitsubishi has hit the stop button on any new product headed in that direction.
Mercedes-Benz, Only With Less Fun
There’s a plan afoot to more carefully align Mercedes-Benz’s U.S. product offerings with consumer demand, all the while saving the automaker money. The result, Automotive News reports, will be a lineup lacking the flair and whimsy the brand once enjoyed.
Fans of two-door variants, especially, stand to lose out under this new strategy.
BMW Looks to Shed About 6,000 Positions, Ends AV Partnership With Mercedes
Bavaria-based BMW says it aims to cut roughly 6,000 positions from its lineup on account of coronavirus complications. Times are tough and the manufacturer needs to tighten its belt, just like many of its peers.
The alley-oop that precedes the slam dunking of these jobs into the wastebasket will be tempting retirement packages for those of a certain age. But BMW also said it is interested in offering younger people financial assistance for full-time higher education with a guarantee of a job when they’re done — offering some amount of hope.
Mitsubishi in America: Slow Fade-out Ahead?
Mitsubishi watched as its U.S. and Canadian volumes rose steadily over the past several years — growth hampered by a limited product lineup and so-so vehicle quality. Still, it was growth, and Mitsu made sure to celebrate each year-over-year sales increase.
Well, that was then, and this is now. As a member of an alliance dominated by Renault and Nissan and hit hard, like many others, by the coronavirus pandemic, the future holds a different strategy for the Japanese automaker. For the U.S., it also seems to hold fewer Mitsubishis.
Report: Monday Meeting Could See Volkswagen's Diess Replaced
A report last week in a German publication stated that Volkswagen Group was looking for someone new to take charge of its namesake brand. The new blood would come in the form of Porsche CEO Oliver Blume, sources said.
We’re now hearing there’s an “extraordinary” supervisory board meeting being held at VW today, and that the result could be current brand chief Herbert Diess being bounced from his role.
GM CEO Says Pandemic Helped Cut Costs; Decontenting Incoming
On Tuesday, General Motors CEO Mary Barra suggested her company would exit the other side of the coronavirus pandemic running much leaner than when it went in. While this will probably be the case for other automakers, as many (including General Motors) went into 2020 with restructuring efforts planned or already underway, GM is letting everyone know it’s doing cuts extra right.
This likely has to do with the automaker not wanting to look as though it’s in for a repeat of 2008, now that the global economy’s once again careening toward troubled times — but we’re just guessing. It also seems as though the extreme lack of industrial progress created by months of factory shutdowns has forced executives to fill the void with a lot of hot air. Fortunately, Barra’s message wasn’t totally devoid of useful information.
Renault Scores Loan From Guess Who?
Renault — struggling, like all other automakers, from the body blow called COVID-19 — has secured a financial lifeline from an unsurprising source: the French government.
France, which holds a 15 percent stake in the automaker, signed off on a $5.6 billion rainy day fund for the company, guaranteeing 90 percent of the borrowed sum. That takes a fair bit off the heat off.
Renault Makes Like Nissan, Cuts Future Production, Spending, Jobs
The same week that Nissan outlined a supposedly sustainable path forward, alliance partner Renault did the same thing, revealing a blueprint for a streamlined business and pared-down workforce in the years ahead.
Annual production will be cut, plants will be shuttered, and about 15,000 employees will be let go, the automaker said. The company’s problem was thinking too big, its interim CEO remarked — something Renault’s former boss might disagree with.
Nissan and Renault Divvy Up Production Responsibilities
Nissan and Renault opted against a full merger on Wednesday, but neither side seemed to feel now was the time to disband the alliance and see how they might fare as a solo act. Every member of the Renault–Nissan–Mitsubishi Alliance took time to address financial concerns last year, encouraging further product integration as a cost-mitigation strategy. Despite Nissan shareholders and staff clearly losing interest in the French-led confederation, the brand seems to understand that leaning upon its allies might be the only way to get through a period of increasing economic uncertainty.
Mitsubishi slashed its 2020 financial forecasts ahead of the coronavirus pandemic by over $500 million while the other two issued numerous profit warnings in the latter half of 2019. Now the world is exiting lockdowns and assessing the economic damage they caused. Obviously, this is not the time to be burning bridges, even if some alliance partners aren’t enthralled with what’s probably waiting on the other side.
The Big Shrink: Mitsubishi Thinks Small After Profit Plunge
Mitsubishi Motors’ membership in the great Renault-Nissan alliance won’t protect it from economic realities arising from the coronavirus pandemic. On Tuesday, the automaker announced an 89-percent drop in operating profit for the year ended March, with black ink totaling just $119 million.
Rocked by the virus that’s thrown every automaker’s balance sheet into disarray, Mitsubishi scrapped its planned dividend and held back from issuing a projection for the current year. It’s also thinking small. The virus has changed the global landscape, and Mitsubishi says it will have to change to meet the challenge.
Nissan CEO Prepares to Swing the Axe Even Harder; North America in the Line of Fire
Dismally poor performance in a key market has left Nissan’s freshly minted CEO, Makoto Uchida, with no other option than to cut deeper.
Already, the struggling automaker’s North American arm has faced a workforce furlough, severe restrictions on travel, pared-down build configurations on new models, and a host of other cost-cutting efforts, but the present situation calls for more.
Replying to angry shareholders in Japan, Uchida promised to be merciless.
Record Sales, Lackluster Earnings As Mercedes-Benz Shoves Cash Into Evs
Mercedes-Benz sold a record 2,385,400 passenger vehicles around the globe in 2019, topping the previous year’s tally by some 3,400 units, and subsequently brought in more money while doing it. Revenue rose 3 percent, the automaker said in its end-of-year earnings report, but that intake didn’t translate into more profit.
Far from it.
As the automaker embarks on a cost-cutting campaign aimed at freeing up cash for electric vehicle development, among other things, the German manufacturer announced its net profit dropped to $2.95 billion from $8.29 billion in 2018. As a result, shareholders can expect a paltry dividend payout.