Nissan fights for survival as collapse looms in 12 months

In the current landscape of the automotive industry, Nissan is under significant threat as it grapples with the ascendancy of Chinese car manufacturers who are capturing substantial market share globally, including in Australia. These local manufacturers, particularly in the electric vehicle sector, offer affordable and technologically advanced options that have become increasingly popular with consumers. Despite being the 10th most popular car brand in Australia as of November, Nissan’s leadership acknowledges that it has struggled to keep pace with evolving automotive trends and consumer demands, particularly regarding hybrid and electric vehicles. This ongoing situation is compounded by internal issues, such as turbulence in leadership and strategic misalignment, which have left the company in a precarious position. Nissan’s management has expressed serious concerns about the company's future. In the face of intense competition from brands like BYD and MG, which are emerging as formidable players in the market, a senior official from Nissan has warned that the company has a limited window of about 12 to 14 months to rectify its course and survive. Recently, Nissan announced a job cut of 9,000 positions and plans to reduce its global manufacturing capacity by 20%, aiming to save approximately $2.6 billion in response to a persistent sales downturn, particularly in challenging markets like China and the US. While Nissan's leadership, including Chief Executive Makoto Uchida, is taking significant pay cuts to symbolize commitment to the turnaround effort, there are doubts within the company regarding the sufficiency of these measures. The situation for Nissan is further complicated by the fallout from the scandal involving former Chairman Carlos Ghosn, whose controversial exit from the company in a dramatic fashion in 2019 has led to lingering uncertainty regarding governance and strategic direction. The company, which previously thrived under Ghosn's leadership and the alliance with Renault, has faced difficulties in maintaining a coherent strategy in his absence. Speculations about potentially seeking partnerships with other car manufacturers, notably Honda, have emerged, although these are considered as last-resort measures amidst a dire crisis. Outside factors are also exacerbating Nissan's plight, particularly new regulatory challenges presented by the UK government's Zero Emissions Vehicles Mandate. Nissan fears that its ability to invest in the market could diminish due to strict requirements to increase electric vehicle sales each year. As a result, Nissan is advocating for more flexibility regarding these mandates to allow for better compliance without incurring significant fines. The overall complexity of the market landscape, characterized by an anticipated rise in competition with the introduction of numerous new brands within Australia, poses a threat to Nissan's traditional market share, requiring urgent strategic reassessments and adaptations to stay afresh in the automotive race.