Nissan enhances business strategy for the year ahead

Nissan is implementing immediate measures to turn around its performance and create a leaner, more resilient business that is capable of swiftly adapting to changes in the market. Nissan have shared details regarding these actions and outlined their targets and key initiatives for the 2026 fiscal year.

Nissan are fully committed to their turnaround actions and aim to reduce costs by approximately 400 billion yen. The company is dedicated to achieving a more efficient cost structure while driving top line growth through enhanced competitive products that cater to the diverse needs of customers.

Target for fiscal year 2026

Nissan plans to reduce its cost structure as well as fixed and variable costs by a total of approximately 400 billion yen in fiscal year 2026, which will reduce its break-even point in the automotive business in fiscal year 2026 from 3.1 million units to 2.5 million units, enabling a stable operating margin of 4%.

Looking at fixed costs, savings of approximately 200 billion yen are targeted from selling, general and administrative expenses, about 100 billion yen from restructuring the manufacturing base and around 30 billion yen from development efficiencies.

Nissan will also reduce their workforce by 2 500 employees by streamlining operations, implementing hiring reductions and accelerating voluntary separation programs. Nissan will achieve reductions in unit labour costs with additional measures including the expansion of shared service centres by 1 000 positions and the prioritisation of fixed marketing expenses.

Nissan aims to achieve approximately 100 billion yen in savings by consolidating production lines, adjusting shift patterns and transferring jobs. This rightsizing is expected to reduce headcount in vehicle and powertrain plants to 6 500. These production savings will be complimented by new engineering and operational efficiencies, including the launch of new models and reduced CAPEX and cost expenditure for product introductions.

In terms of restructuring its manufacturing base, Nissan plans to reduce its global production capacity by 20% and optimise its manufacturing workforce by fiscal year 2026. In total, including plants in China, Nissan is aiming to reduce global production capacity from the current 5 million units to 4 million units by fiscal year 2026.

Nissan is also targeting an approximately 30 billion yen cost reduction through improved development efficiency. The family development market will shorten time-to-market and reduce development costs, achieving about 20 million yen in efficiencies. The integrated approach will be applied to ongoing projects, with the benefits realised from 2025 and the first model utilising this process set to launch in fiscal year 2026.

100 billion yen in variable cost saving

Nissan aims to reduce design driven costs by approximately 60 billion yen, starting with the simplification of design which includes the adjustment of model performance and content, across six of its major products. Various initiatives for operational cost reduction include reducing parts complexity by up to 70%, improving production planning to eliminate supply chain inefficiencies and lower warehouse costs and enhancing efficiency while reducing costs in after sales parts warehousing.

Driving topline growth

To ensure revenue growth, Nissan will provide a suite of products equipped with differentiated technologies tailored to global customer needs.

In 2024, Nissan refreshed its model line up, offering a range of differentiated products including the Qashqai, Juke, Kicks, Armada, Note, Patrol, Magnite, QX80 and Murano. Each model has been renewed in order to maximise customer value.

In 2025 and 2026, Nissan will introduce new plug-in hybrid models as well as refresh its award winning mini vehicles and large minivans. Nissan also plans to strengthen its zero emission EV line up with the new Leaf, an all-new compact EV and a new NEV destined for the Chinese market.

The contribution to sustainable profitable growth is exemplified by third-generation e-POWER models which offer significant improvements including a 20% improvement in fuel efficiency and cost compared to the first generation.

Nissan’s future profitability will also depend on technical innovation, with an increased focus on intelligent vehicles. Unique intelligent cockpits and driver assistance features will be introduced in models planned for launch by fiscal year 2026. In the coming years, Nissan aims to democratise door to door autonomous driving and offer driverless mobility services in Japan.

This combination of new model launches, market expansions and strategic initiatives will drive top line growth in fiscal years 2025 and 2026, with a plan for volume sales increases through model replacements and expansion into new segments.