Following Nissan's first annual loss in 11 years, the automaker's leadership has some 'splainin to do. In addition to declining sales and profitability concerns, Nissan has several outdated models that are crying out for attention. After dusting themselves off from last year's struggles, Nissan's C-suite is now laser-focused on the future. CEO, Makoto Uchida, has revealed a restructuring initiative that will shake up the company's operations and lineup. The plan aims to cut costs, streamline global operations, and dig Nissan out of its hole. Here's what this means for fans of Nissan and its luxury brand, Infiniti.
Nissan's 4-Year Plan
Nissan has outlined a 4-year roadmap to profitability which is comprised of two strategies: reaching sustainable growth and making significant cost-cutting measures. By following this plan, the automaker aims to achieve stability and profitability by 2023. Although many details remained undisclosed, here's what we know will change for the automaker, and more importantly, the customer.
Prioritizing Core Markets and Products
To reach sustainable growth, Nissan will focus on operations in Japan, China, and North America. It will also zero in on its core model segments including midsize and large cars, electric vehicles like the future Ariya, and sports cars like the Z car. Nissan plans to introduce 12 models in the next 18 months and expects more than 1 million electrified units sold by the end of 2023.
“Nissan must deliver value for customers around the world. To do this, we must make breakthroughs in the products, technologies, and markets where we are competitive. This is Nissan’s DNA. In this new era, Nissan remains people-focused, to deliver technologies for all people and to continue addressing challenges as only Nissan can.” Said CEO, Makoto Uchida.
#Nissan CEO Makoto Uchida on our new transformation plan, which he announced earlier: "We are prioritizing product segments and core markets to bring Nissan back on track towards sustainable growth.” Learn more about the plan here: https://t.co/W7MHTNcIlQ pic.twitter.com/EuaGBhjFhs— Nissan Motor (@NissanMotor) May 28, 2020
Cost Cutting Measures
The restructuring plan reveals significant cost-cutting measures that will streamline operations and reduce models from Nissan's lineup. 20% of Nissan's global lineup will be cut, bringing down the product count from 69 to less than 55. Nissan will also cut operations costs by consolidating North American production around core models and closing its Barcelona plant and Indonesia manufacturing facility.
The automaker plans to utilize more resources from the Alliance, a long-standing partnership with Mitsubishi and Renault, to sustain operations outside of its core markets and products. The goal of these measures is to reduce $2.8 billion from Nissan's fixed costs.
What Does Infiniti's Future Hold?
Although Nissan did not directly address the future of Infiniti in the restructuring announcement, the premium brand’s lackluster sales indicate that there will be major changes. According to Automotive News data, Infiniti has been struggling with falling sales in the U.S. which is its biggest market. 2019 sales were down 21% in the U.S. from the previous year, and the brand has seen falling sales worldwide for the last four years.
Automotive News confirmed that Infiniti will be reinventing itself alongside Nissan. In an interview with the outlet, Infiniti CEO, Ashwani Gupta, makes the bold claim that "Infiniti will be great again.” To reach this goal, Infiniti plans to shift from competing in the luxury segment and focus on a new “Nissan-Plus” model. In addition to moving away from a true luxury offering, Infiniti vehicles will utilize more platform sharing with Nissan.
According to Motor Authority, Nissan DNA will be much more prominent in Infiniti's lineup, in step with Nissan's 2023 benchmark. "That plan involves making greater use of Nissan platforms and components, including the parent firm's e-Power hybrid system. Infiniti's current rear-wheel-drive models will likely be replaced by a Nissan platform, perhaps derived from the Altima or Maxima. The first of these new models could arrive by 2023."