After disappointing sales, Nissan is slashing its profit forecast and cutting costs.
Japanese automaker Nissan Motor announced this week it would cut one-fifth of its global manufacturing capacity and eliminate 9,000 jobs, in the wake of lackluster sales results in the U.S. and Chinese markets. Those decisions are part of an effort to “lower administrative expenses” as it faces stiffer competition. Nissan went further to revise its annual profit outlook in its latest earnings report, cutting its profit forecast by 70%, to $975 million.
The most recent news outlines two of Nissan’s most glaring vulnerabilities: extremely tough EV competition in China, as well as a lack of hybrids in the United States. Hybrids, in particular, are rapidly growing in popularity as a more appealing option to fully electric vehicles. It’s a market shift some of Nissan’s most prevalent rivals, like Toyota, were fully prepared to exploit, while CEO Makoto Uchida told a press conference Nissan misjudged.
“We didn’t foresee HEVs ramping up this quickly,” he said during that conference. To wit, Nissan dropped its hybrid version of the Rogue SUV back in 2019, and its plug-in hybrid version of the new Rogue won’t be here until next year.
While the pace of electric car adoption in the U.S. isn’t as feverish as automakers were hoping, it’s a different story in China. Homegrown automaker BYD is taking full advantage of a rapidly evolving EV market with more affordable options, again leaving automakers like Nissan struggling to maintain market share. In fact, Nissan’s Chinese sales dropped 14.3% for the first half of the company’s financial year, which runs between April 2024 and March 2025. Sales in the United States also fell by 3%, which further contributed to the automaker’s recent cash crunch.
Mitsubishi buys back 10% of its shares from Nissan
On the same day Nissan announced it would cut jobs and manufacturing capacity, Mitsubishi confirmed its decision to buy back over 10% of Nissan’s existing shares in the automaker.
In its official statement, Mitsubishi said it would buy back 149,028,300 shares through the Tokyo Stock Exchange, at an equivalent value of $3.01 per share (or nearly $448.58 million). The consignment will reduce Nissan’s holding in Mitsubishi from 34.07% to 24.05%.
Neither automaker stated their decisions were directly related, with Mitsubishi putting its buyback decision down to a “recent trend to reduce cross-shareholdings.” It further said reducing Nissan’s interest in the company came “after considering ways to improve capital efficiency and expand shareholder returns.”
Mitsubishi did stress that it would still work on collaborative efforts with Nissan, though it’s unclear for the moment exactly what that will look like. Both automakers announced a partnership on several new vehicles early this year, including a new pickup truck for the U.S. market. The Renault-Nissan-Mitsubishi Alliance also still exists (and has for the past several years), though we will have to wait and see whether the automakers’ decisions this week will impact new car and truck development moving forward.
