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.
Tesla continued to prove itself as the electric automaker par excellence by posting its fifth profitable quarter in a row on Wednesday. The California-based (for now) automaker reported a net income of $331 million and a 39 percent improvement in revenue to $8.8 billion.
Of course, a huge amount of that money came via regulatory credits Tesla sold to its rivals. By nature of being an EV manufacturer, the company was able to sell $397 million in environmental absolution while helping its own bottom line. Though third-quarter deliveries were quite strong as automotive revenue jumped 42 percent to $7.6 billion.
Barely a full day after news broke that Ford was on the cusp of announcing layoffs, Ford announced those layoffs. On Wednesday, the automaker informed employees that it needs to eliminate 1,400 salaried jobs as part of its $11-billion restructuring program. The good news is that these cuts will be handled through retirement buyouts that won’t leave the departing workforce empty handed. The automaker’s internal memo also stated that the buyouts would be voluntary.
The Blue Oval previously said it expects a full-year loss in 2020 thanks to the pandemic, with a pre-tax profit of anywhere between $500 million and $1.5 billion in the third quarter.
With a large number of automakers pinching pennies these days, it’s easy for the details of various restructuring plans to fall down the memory hole. For example, Ford has been engaged in an ambitious cost-cutting program since 2018. The $11-billion plan was said to take anywhere from three to five years to complete, requiring legitimate sacrifices at the company — including the discontinuation of all sedans in the United States, ending operations in Russia, closing facilities in Europe, and rolling layoffs around the globe.
Ford has actually accelerated its timeline to see how much it can get done before 2021, resulting in the elimination of 7,000 salaried positions globally last year. The company has decided to end another 1,000 salaried positions in the United States.
Already in the midst of a comprehensive restructuring plan with partners Nissan and Mitsubishi, Renault announced a staggering 7.29 billion euro ($8.6 billion) loss on Thursday. That tally encapsulates the first half of the year and marks a new record for the brand, even if it’s not the kind one normally celebrates.
“Although the situation is unprecedented, it is not final. Together with all of the Group’s management teams and employees, we are fully dedicated to correcting the situation through a strict discipline that will go beyond reducing our fixed costs,” new CEO Luca de Meo said in response to the dismal financial report. “Preparing for the future also means building our development strategy, and we are actively working on this. I have every confidence in the Group’s ability to recover.”
Based on Mitsubishi’s bleak assessment of its own future, you might have thought it would be the automaker winning this week’s award for saddest economic forecast. But Nissan refused to be outdone. Having already warned the world that 2020 would prove harrowing even before anyone heard the term “COVID-19,” the brand now predicts an operating loss of 470 billion yen ($4.5 billion USD).
Nissan likewise estimates total revenue declining by one-fifth through year’s end to 7.8 trillion yen ($74.1 billion) as its worldwide vehicle sales continue a longstanding retreat.
While it’s difficult to know what to peg these losses on, there are a few obvious suspects. Both automakers sacrificed their identities as automakers in order to spend years trying to expand globally, with a particular focus on developing countries and bland models assumed to have mainstream appeal. Nissan even re-launched the Datsun name as an affordable alternative in places like India, but it wasn’t the sales success the company envisioned.
The earnings picture is growing gloomier at Ford, with the automaker now preparing investors for a steep loss in the first quarter of the year. After posting a poor Q4 report for the end of 2019, some of that pre-pandemic weight could carry over onto this report card — where it will mix with U.S. sales that tanked in the middle of March.
If only it was American sales Ford needed to worry about.
China’s Geely Automobile Holdings Ltd said on Wednesday that its first-half net profit slipped 40 percent due to the extended economic downturn impacting in the region. According to Reuters, the manufacturer posted a net profit of 4.01 billion yuan ($568.5 million) during the most recent half vs the 6.67 billion yuan it made over the same period a year earlier.
Sales growth is also down. Between January and June, Geely sold 651,680 vehicles — roughly 15 percent less than in the same period in 2018. Finding something to attribute that to will be easy, however. China’s automotive market has been on a downhill slope for 13 consecutive months and we know of at least two reasons why.
Keen to expand into new segments and redefine itself as an auto brand, Aston Marin is now a publicly traded company with a crossover vehicle on the horizon. The plan, established by CEO Andy Palmer and about as novel as dirt, was due for a checkup last week. Sadly, the automaker was not released with a clean bill of health. Aston reported a pre-tax loss of £78.8 million ($92 million) in the six months ending in June.
Speaking with the media, Palmer argued that the company had done well in the first quarter but claimed economic conditions and dwindling dealer interest had hurt the business in Europe, the Middle East and Africa. The United States performed comparatively better — possibly due to the marque bringing on Tom Brady as a brand ambassador, even though at least two of the cars built with the athlete’s name on them have already passed through the secondhand market $100,000 below sticker. Unfortunately, minor victories weren’t nearly enough to keep the firm’s share price from tumbling downward like an allegedly deflated football.
On Wednesday, we reported Nissan was preparing a financial report that was presumed to involve quarterly profit falling by around 90 percent — necessitating roughly 10,000 job cuts. At the time, Nissan gave some vague confirmation that the estimates were accurate while halfheartedly attempting to refute them.
However, when the official numbers came out on Thursday, the reality was worse than initially assumed. Nissan reported an almost 99-percent drop in operating profit in the latest quarter, citing falling sales in every major market except China. Rather than 10,000 job cuts, it’ll require 12,500.
Nissan is currently preparing a financial report that is alleged to show its first-quarter profit falling by around 90 percent, necessitating over 10,000 job cuts. The company told the world to brace for a bad year in May, following an abysmal earnings report for the 12-month period ending on March 31st, 2019. At the time, CEO Hiroto Saikawa said the automaker had “hit rock bottom.” But Nissan is still falling, if reports are to be believed.
The Japanese company released a statement that vaguely refutes the claims against on Wednesday while also validating them. However, numerous unnamed insiders have suggested the reports are accurate and several named staffers acknowledged that the automotive firm was facing serious problems.
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- Carsofchaos Bike lanes are in use what maybe 10 to 12 hours a day? The other periods of the day they aren't in use whatsoever. A bike can carry one person and a vehicle can carry multiple people. It's very simple math to figure out that a bike lane in no way shape or form will handle more people than cars will.The bigger issue is double parked delivery vehicles. They are often double parked and taking up lanes because there are cars parked on the curb. You combine that with a bike lane and pedestrians Crossing wherever they feel like it and it's a recipe for disaster. I think if we could just go back to two lanes of traffic things would flow much better. I started coming to the city in 2003 before a lot of these bike lanes were implemented and the traffic is definitely much worse now than it was back then. Sadly at this point I don't really think there is a solution but I can guarantee that congestion pricing will not fix this problem.
- Charles When I lived in Los Angeles I saw a 9-5 a few times and instanly admired the sweeping low slug aerodynamic jet tech influenced lines and all that beautiful glass. The car was very different from what I expected from a Saab even though the 900 Turbo was nice. A casual lady friend had a Saab Sonnet, never drove or rode in it but nonetheless chilled my enthusiasm and I eventually forgot about Saabs. In the following years I have had seven Mercedes's, three or four Jaguars even two Daimlers both the 250 V-8 and the massive and powerful Majestic Major. Daily drivers of a brand new 300ZX 2+2 and Lincolns, plus a few diesel trucks. Having moved to my big farm in central New York, trucks and SUV's are the standard, even though I have a Mercedes S500 in one of my barns. Due to circumstances with my Ford Explorer and needing a second driver I found the 2006 9-5 locally. Very little surface rust, none undercarriage, original owner, garage kept, wife driver and all the original literature and a ton of paid receipts and history. The car just turned 200,000 miles and I love it. Feels new like I'm back in my Nissan 300ZX with a lot more European class and ready power with the awesome turbo. So fun to drive, the smooth power and torque is incredible! Great price paid to justify going through the car and giving her everything she needs, i.e., new tires, battery, all shocks, struts, control arms, timing chain and rust removable to come, plus more. The problem now is I want to restore it and likely put it in my concrete barn and only drive in good weather. As to the writer, Alex Dykes, I take great exception calling the 9-5 Saab "ugly," finding myself looking back at her beauty and uniqueness. Moreover, I get new looks from others not quite recognizing, like the days out west with my more expensive European cars. There are Saabs eclipsing 300K rourinely and one at a million miles and I believe one car with 500K on the original engine. So clearly, this is a keeper, in love already with my SportCombi. I want to be in that elite club.
- Marky S. I own the same C.C. XSE Hybrid AWD as in this article, but in Barcelona Red with the black roof. I love my car for its size, packaging, and the fact that it offers both AWD and Hybrid technology together. Visibility is impressive, as is its small turning circle. I consider the C.C. more of a "station wagon" by proportion, rather than an “SUV.” It is fun to drive, with zippy response and perky pick-up. It is a pleasant car to drive and ride in. It is not trying to be a “Butch Off-Roader”, or a cosseting “Luxury Cruiser.” Those are not its goals or purpose. The Corolla Cross XSE Hybrid AWD is a wonderful All-Purpose Car (O.K. – “SUV” if you must hear me say it!) with a combination of all the features it has at a reasonable price.
- Ernesto Perez There's a line in the movie Armageddon where Bruce Willis says " is this the best idea NASA came up with?". Don't quote me. I'm asking is this the best idea NY came up with? What's next? Charging pedestrians to walk in certain parts of the city? Every year the price for everything gets more expensive and most of the services we pay for gets worse. Obviously more money is not the solution. What we need are better ideas, strategies and inventions. You want to charge drivers in the city - then put tolls on the free bridges like the Brooklyn, Manhattan and Williamsburg bridges. There's always a better way or product. It's just the idiots on top think they know best.
- Carsofchaos The bike lanes aren't even close to carrying "more than the car lanes replaced". You clearly don't drive in Midtown Manhattan on a daily like I do.