TOKYO (Reuters) – Nissan Motor Co (7201.T) will unveil its plan to become a smaller, more cost-efficient automaker on Thursday as it looks to recover from four years of tumbling profits which are set to culminate in its first annual operating loss in 11 years.

The Japanese carmaker’s second recovery plan in less than a year will outline how it will slash fixed costs, streamline its products and shore up cash as it reels from a plunge in sales as the coronavirus pandemic hits demand for cars.

Nissan said in April that it expected to post an annual operating loss of up to 45 billion yen ($417 million) when it announces its results for the year to March 31 at 0800GMT on Thursday, which would be its worst performance since 2008/09.

The automaker sold 4.8 million vehicles in its latest financial year, the second decline in a row and a fall of 13% from last year, knocking it off its perch as Japan’s second biggest automaker to trail Toyota (7203.T) and Honda (7267.T).

The plan will follow a new strategy announced by Nissan and its partners Renault SA (RENA.PA) and Mitsubishi Motors Corp (7211.T) on Wednesday to work more closely on developing and producing cars to reduce costs and ensure the group’s survival.

Even before the spread of the coronavirus, Nissan’s sales and profits had been slumping, forcing it to row back on an aggressive expansion plan pursued by ousted leader Carlos Ghosn.

The pandemic has only piled on the urgency and pressure to renew its efforts to downsize.

Nissan’s operating profit has tumbled for four consecutive years as its pursuit of market share, particularly in the United States, led to overcapacity at its car plants, steep discounting and a cheapened brand.

The three-year strategy will lay out a path to sustainable profitability and is the vision of Chief Executive Makoto Uchida and Chief Operating Officer Ashwani Gupta, who took over after months of internal turmoil following Ghosn’s arrest in 2018.

Under the plan, Nissan will curb its ambitions for sales growth to target annual sales of about 5 million units, Reuters reported in April, a cut from a previous goal of 6 million cars outlined in July by then-CEO Hiroto Saikawa.

Another top priority will be the preservation of cash. As of December, Nissan’s automotive operations had negative free cash flow of 670.9 billion yen, a more than six-fold increase from a year ago.

Reporting by Naomi Tajitsu; Editing by David Clarke

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Exclusive: United Airlines only needs 3,000 of 25,000 flight attendants in June – sources

(Reuters) – United Airlines Holdings Inc (UAL.O) has told staff that it only has work for about 3,000 of its about 25,000 flight attendants in June, sources said, and warned of job losses if demand does not recover by the…

Brent oil falls below $22 per barrel

MOSCOW, April 21. /TASS/. The price of futures contract for Brent crude oil with June delivery on London’s ICE fell by 14.39% to $21.89 per barrel on Tuesday. The last time Brent was below $22 per barrel on March 30.…

Change hides historic opportunity for investors

After ChiNext of the Shenzhen Stock Exchange, the whole Chinese A-share market may embrace the registration-based, market-driven system for initial public offerings next. The reform is not simply about changing IPO procedures. It will revolutionize the investment behavior of each…

TurboTax maker Intuit nears agreement to buy Credit Karma for $7 billion: WSJ

(Reuters) – Intuit Inc is nearing an agreement to buy financial technology portal Credit Karma Inc for about $7 billion, the Wall Street Journal reported. The deal in cash and stock, which will push Intuit further into consumer finance, could…