top of page
Writer's pictureMichael Thervil

NISSAN ON THE BRINK OF SHUTTING DOWN? MAYBE NOT.

Written by Michael Thervil

 


The one thing that Japanese auto manufactures are known for is quality and Nissan is no exception to the rule. Even though for the last couple of years, it’s been a slow burn for Nissan like all auto manufacturers since 2019 when there were two things that played a big role in Nissan’s slumping sales. The first thing was COVID-19 and the second being a shortage in chip manufacturing which nearly brought the entire auto industry to a halt, causing a price hike surge in used cars across America. According to Statistia, Nissan’s net sales sharply dropped from just under 9,878,886 in 2019 to 7,862,572 in 2020.

 

Then in 2021 net sales for Nissan increased to 8,424,585, then there was another increase in Nissan net sales in 2022 which rose to 10,596,695. Then in 2023 net sales for Nissan increased again to 12,685,716. If one was to consider Nissan’s increase in net sales despite of the global economic downturn from COVID-19, auto chip manufacturing crisis, the rapid rise in global inflation, and now with the world facing geopolitical uncertainty which heavily affected international commerce and trade; it’s safe to have an optimistic view that Nissan has the ability to regain its strength through restructuring in the auto manufacturing market.

 

Now with China in the mix, it’s soon to dominate the auto manufacturing world with its highly affordable and ultra luxurious electric vehicles (EV’s) from BYD, China places itself as a direct competitor to both Japanese and American auto manufactures. According to reports, Nissan experienced an 80% - 85% drop in net sales this year.  This significant loss led to the decimation of roughly 7,000 jobs which took a serious toll on the level of production in Nissan’s facilities. In an effort amongst other measures to save $3 billion in liquidity, Nissan CEO Makoto Uchida took a 50% reduction in salary to aid Nissan in meeting its needs as it seeks to restructure, increase sales, and redefine its place in the global auto manufacturing market.

 

Last year and towards the end of the first quarter this year’s French auto manufacturer Renault decided to bail out on Nissan by selling off their remaining 15% shares which is a second round of reduction in their initial 22.73% shares in Nissan which used to give them then 43% control of Nissan. Even though Nissan reciprocated by purchasing 15% of Renault. What’s disturbing about Renault’s move is that it severely cripples the Renault-Mitsubishi-Nissan trilateral partnership.

 

This potential reneging by Renault leaves many Nissan enthusiasts wondering about what Nissan’s counter-move to Renault’s dissociation from the Nissan brand will be. Even more than that, Mitsubishi Motor Corporation, enthusiasts of Mitsubishi, and shareholders alike are also questioning if Renault will bail out on them as well. In short, the old saying seems to be true: “the French cannot be trusted”. It was also reported that because of the financial crisis it’s in, it had to reduce shareholdings in Mitsubishi from 34% to 25%.

 

Beyond that, it can also be said that Nissan also played a role in putting itself in the position that it's in. For some odd reason Nissan was unable to “connect” with car buyers in the EV market in a way that would motivate them to purchase their EV’s. What we mean by this is that the two Nissan produced EV’s “LEAF” and “ARIYA” although attractive in concept, simply did not motivate buyers to purchase these vehicles. The first issue is the price tag when compared to other auto manufacturers in the same class. Then when it came to battery construction and battery life when compared to Chinese manufacture BYD, Nissan failed to put itself in a position to compete. In simple terms, Nissan failed to incorporate the necessary  technology and product innovation to the same level as BYD.

 

What’s happening to Nissan is unfortunate and we think that Nissan can overcome this. But for them to do so they will have to take notes from Chinese electric vehicle manufacturer BYD just like the French are currently doing. Keep in mind that what’s happening to Nissan is not China’s fault, but failure that was sure to happen because Nissan overlooked variables and trends by being shortsighted in approach.

 

 

 

 

41 views0 comments

Recent Posts

See All

Commenti


bottom of page