Nissan Enters Growth Phase: Espinosa
Nissan concluded the first year of its global restructuring with a net loss of US$3.3 billion. However, its CEO, Iván Espinosa, stated that the Japanese automaker is already back on the path to profitability.
When presenting the results for the fiscal year ending March 31, the Mexican executive stated that the reorganization is progressing faster than planned, including plant closures, meaning that the extraordinary expenses resulting from the process are now a thing of the past.
“We have entered a phase of growth,” Espinosa declared at the company’s headquarters in Yokohama, south of Tokyo. “We are ahead of schedule, and the progress is evident,” he emphasized.
Although the losses are still substantial, they represent a reduction compared to the previous fiscal year’s negative result of US$4.2 billion.
Nissan’s performance was impacted by US$2.3 billion in expenses related to the Re:Nissan plan, as well as other costs stemming from the cancellation of plans to produce electric vehicles—extraordinary charges that CFO George Leondis said “are now a thing of the past.”
A 5.8% decline in global retail sales also contributed to the result, with sales totaling 3.15 million units—a figure below the 3.2 million units the company’s executives had projected.
The company reported an operating profit of US$363.3 million (58 billion yen), representing an 11.8% decline from last year’s result, driven in part by a US$1.8 billion impact from tariffs and another US$595 million from the inflationary effect of the global environment.
However, these charges were partially offset by savings of US$1.4 billion (227 billion yen) from cost control measures, which allowed the company to keep its operating profit in the black.
Looking Ahead
Espinosa got straight to the point when outlining what lies ahead following the Re:Nissan restructuring plan: the launch of new products specifically designed to improve retail sales quality in key markets, such as the United States.
Nissan forecasts a 2.2% increase in deliveries to North America, equivalent to 1.32 million vehicles during the current fiscal year.
It also estimates that global sales will rise 4.7%, reaching 3.3 million units, after posting declines in seven of the last eight years.
The 47-year-old CEO, the youngest in the company’s history, stated that operating profit will more than triple to US$1.3 billion, while net income will be $125.3 million (20 billion yen) in his first year back in the black.
