New Delhi. Japan's third largest automobile company Nissan Motor Corp has decided to make major changes in its global operations. The company has announced the layoff of 9,000 employees and a 20 percent reduction in production capacity, so that it can regain its lost share in the electric and hybrid vehicle market. CEO Makoto Uchida will also take 50 percent less salary.
Nissan suffered a loss of 9.3 billion yen (about $60 million) in the September quarter, whereas the company had a profit of 190.7 billion yen in the same quarter a year ago. The company said that these restructuring steps have been taken after an income decline of 94% in the first half.
Will reduce stake in this company
Nissan has burned 448.3 billion euros (about $2.9 billion) of cash in recent months and now plans to sell some of its stake in Mitsubishi Motors Corp. The company's operating income fell 70% short of its forecast, while its revenue outlook was also cut by more than 9%.
Why did the company's problems increase?
Nissan President and CEO Makoto Uchida said that the purpose of these changes is to make the company more flexible and responsive to rapidly changing trends in the market. He said that along with external challenges, the company is also grappling with its own internal issues, including the growing presence of local companies in China and overly ambitious sales targets.
In China, companies like BYD have taken advantage of the surge in demand for electric vehicles, while in America the popularity of hybrid vehicles is increasing. Under these changes, Nissan will increase investment in its EV lineup in China and expand hybrid vehicles in the US. Additionally, the company has also decided to make production more efficient and cut costs by taking advantage of its partnership with Honda.
Through these major changes, Nissan aims to become more competitive in the global automotive market. However, Uchida acknowledged that the road to the future is not easy as the auto industry is undergoing rapid change.
Tags: auto news
FIRST PUBLISHED: November 9, 2024, 19:47 IST