Nissan's new CEO Ivan Espinosa is battling a loss of 33 billion kroner. Several car models are being discontinued, and the Sunderland factory is threatened with closure.
Ivan Espinosa has taken the helm at Nissan during a turbulent time. He faces a particularly difficult task.
On Thursday, the car brand announced that it expects a gigantic loss of around 33 billion Danish kroner in the 2024 financial year.
The new director will now try to reverse the negative development for the Japanese car brand.
Nissan is warning of a bigger loss than previously expected. The deficit for the fiscal year ending March 31 this year is expected to reach approximately 33 billion kroner. This is significantly more than the company had originally budgeted.
The company itself reports the large expected loss in a press release . The reason is, among other things, higher restructuring costs than expected.
The crisis has already had major consequences for employees. Nissan has previously announced layoffs of 9,000 employees globally.
However, further cuts may be on the way as a result of the worsening economic situation.
There is also great uncertainty about the future of several of Nissan's major car factories. The UK factory in Sunderland, which employs 6,000 people, is now openly mentioned as one of the factories in the danger zone.
The factory, which has a production capacity of 280,000 cars per year, has already been significantly reduced. Read more about it here .
Nissan models and factories under pressure
Nissan Vice President Alan Johnson recently spoke in the British Parliament. He said that England "is not a competitive place to build cars." The statement adds to concerns about the future operation of the Sunderland plant.
The production of new car models is also being hit by the crisis. Nissan has announced that it is halting the development of two new electric cars. They would otherwise have been built in the United States.
At the same time, sales of the Nissan Rogue, which is identical to the European X-Trail, and the Infiniti models have stopped in the US. The cars in question are built at a factory in Mexico.
The large losses are due to several factors. Costs for a comprehensive restructuring of the company weigh heavily on the accounts.
Furthermore, previously introduced trade restrictions, including Donald Trump's tariffs, continue to put pressure on the car brand's finances.
Nissan has tried to find solutions to the economic challenges. Last year, there were talks with competitor Honda about a possible partnership.
However, the potential deal fell to the ground with a bang because Nissan would not agree to become a sub brand under Honda.
The breakdown in negotiations also led to the resignation of Nissan's now former director Makoto Uchida.
Ivan Espinosa's plan for Nissan
Nissan's sales figures have seen better days. In 2018, the brand sold 5.5 million cars worldwide. This year, the company expects to sell only 3.35 million cars, according to the latest downward revision.
New CEO Ivan Espinosa took office in early April and is now working to implement major cost savings, with the goal of getting Nissan back on a stable financial path.
"Despite these challenges, we have significant financial resources, a strong product pipeline and the will to turn Nissan around in the coming period," Ivan Espinosa said in a statement on Thursday.
The question is whether willpower and current resources are sufficient. Nissan faces an enormous challenge to regain its former strength and market position. The automotive industry and financial markets are closely following the developments at the Japanese giant.
On the other hand, it is not the first time that Nissan has had financial troubles. It was a looming bankruptcy that in the 1990s put a dent in what later became the Renault-Nissan alliance. An alliance that is now nearing its dissolution.
