But what the announcement means for workers at the firm’s Sunderland plant is unclear.
The company is cutting 12,500 jobs globally as it looks to reduced capacity by 10 per cent – but there is no word on where the axe is set to fall.
Rumours of major job cuts circulated yesterday and Nissan confirmed the news as it announced its financial results for the first quarter of the year this morning, Thursday, July 25, which saw net income almost wiped out.
“Nissan is implementing strategic reforms in order to build an operational base that will ensure consistent and sustainable profitability over the medium term,” said a company statement.
“The company is moving quickly to optimize cost structures and manufacturing operations, while also enhancing brand value, steadily refreshing its lineup and achieving consistent growth globally, including in the U.S.
“To improve its overall utilization rate, Nissan will reduce its global production capacity by 10% by the end of fiscal year 2022. In line with production optimizations, the company will reduce headcount by roughly 12,500.
“Furthermore, the company will reduce the size of its product lineup by at least 10% by the end of fiscal year 2022 in order to improve product competitiveness by focusing investment on global core models and strategic regional models.
“While some of these initiatives are already underway, the company expects that substantial improvements in its performance will take time.”
The firm said profitability had been affected by the decrease in revenues and external factors such as raw material costs, exchange rate fluctuations and investments to meet regulatory standards.
In the first quarter of the financial year 2019, global total industry volume decreased 6.8% to 22.5 million units, while Nissan’s global unit sales decreased 6.0% to 1.23 million units.
In Japan, Nissan’s sales decreased 2.6% to 126,000 units. The all-new Nissan Dayz was well received when it went on sale in March, with demand remaining very strong throughout the quarter.
In China, where Nissan reports figures on a calendar-year basis, unit sales increased 2.3% to 344,000 units, representing a market share of 5.7%, a 0.7 percentage point increase from the comparable period in the prior year. This was driven by strong demand for models including the Sylphy sedan and Qashqai and X-Trail crossovers, as well as Venucia-brand models such as the T60 crossover.
In the U.S., Nissan’s sales totalled 351,000 units, equivalent to a market share of 7.9%.
Nissan sales in Europe, including Russia, fell by 16.3% to 135,000 units. Market share in Europe was 2.5%. Unit sales in Russia decreased 21.7% to 18,000 units, equivalent to a market share of 4.1%.
In other markets, including Asia and Oceania, Latin America, the Middle East and Africa, Nissan’s sales decreased 13.1% to 174,000 units.