Japanese automaker Nissan announced a staggering net loss of 671 billion yen ($4.5 billion) for the 2024-25 fiscal year on Tuesday, marking one of its worst financial performances in decades.
The company confirmed plans to cut 15 per cent of its global workforce, amounting to approximately 20,000 jobs, as part of a sweeping restructuring effort to stabilize its struggling business.
The automaker, which recently saw merger talks with Honda collapse earlier this year, did not provide a net profit forecast for the current fiscal year that began in April, citing uncertainty around U.S. tariff measures. However, Nissan projected sales of 12.5 trillion yen for 2025-26.
CEO Ivan Espinosa explained the decision to withhold profit projections, stating: “The uncertain nature of U.S. tariff measures makes it difficult for us to rationally estimate our full-year forecast for operating profit and net profit, and therefore we have left those figures unspecified.”
He emphasized the urgent need for reform, adding: “Nissan must prioritise self-improvement with greater urgency and speed.”
This year’s loss nearly matches Nissan’s worst-ever annual net loss of 684 billion yen recorded in 1999-2000 during a financial crisis that led to its troubled partnership with French automaker Renault.
Despite the grim financial results, Nissan’s shares closed 3 per cent higher on Tuesday following confirmation of its restructuring plans, which include consolidating its vehicle production plants from 17 to 10 by fiscal year 2027.
The company faces multiple challenges, including intense competition from Chinese electric vehicle manufacturers and potential impacts from U.S. tariffs. In a statement addressing its China strategy, Nissan said: “In China, we will strengthen our market performance by unleashing multiple new-energy vehicles.”
The failed merger with Honda, which collapsed in February when Honda proposed making Nissan a subsidiary rather than integrating under a holding company, represented another setback for the automaker.
Nissan’s troubles have compounded in recent years, beginning with the dramatic 2018 arrest and subsequent escape of former chairman Carlos Ghosn, who fled Japan hidden in an audio equipment box.
The company’s stock has plummeted nearly 40 per cent over the past year, and credit rating agencies have downgraded Nissan to junk status, with Moody’s citing its “weak profitability” and “ageing model portfolio.”
Adding to its challenges, Nissan recently shelved plans to build a $1 billion battery plant in southern Japan due to the difficult “business environment.” Analysts warn that Nissan may be particularly vulnerable to United States President Donald Trump’s 25 per cent tariff on imported vehicles.
Bloomberg Intelligence analyst Tatsuo Yoshida explained: “Its clientele has historically been more price-sensitive than that of its rivals. So the company can’t pass the costs on to consumers to the same extent as Toyota or Honda without suffering a significant loss in sales units.”
As Nissan embarks on its aggressive restructuring plan under CEO Espinosa, who took office in March, the automaker faces a critical period that will determine whether it can regain its footing in an increasingly competitive global market.