In a dramatic turn for the automaker, Nissan Motor Company CEO Makoto Uchida, recently announced sweeping cost-cutting measures in response to a steep drop in profits and sales in 2024. Describing the situation as “emergency mode,” Nissan is implementing an aggressive series of cutbacks to stave off further losses. The CEO is going as far as taking a massive pay cut to show his commitment. Here’s a closer look at the company’s dire situation, and what Nissan’s future could look like in the American car market. 

Major Cutbacks and Restructuring to Save $3 Billion

On November 7, 2024, Nissan announced that it would be cutting 9,000 jobs and reducing its global production capacity by 20%, aiming to streamline operations and save $3 billion. These actions follow a lowered annual profit outlook, a forecasted 74% decline in operating profit, and a sales projection that’s down 1.2% from 2023. 

Nissan is also selling nearly a third of its stake in alliance partner Mitsubishi Motors, estimated to bring in $482.7 million in cash. Even after the sale, Nissan is expected to remain Mitsubishi’s largest shareholder.

CEO Makoto Uchida has taken personal responsibility for Nissan’s recent struggles. Uchida is announcing that he will forfeit 50% of his own compensation as the company grapples with shrinking global sales. Reflecting on the need to adapt Nissan’s strategy to “rapid changes in markets,” Uchida emphasized that restructuring is the only path forward. 

Production Cuts and Lineup Adjustments to Meet Demand

Nissan also announced that it is lowering output across several of its high-volume U.S. models, with production cuts in place for the Rogue crossover and Frontier pickup. The Rogue is made in Tennessee, while the Frontier is made in Mississippi. Together, these models account for about 40% of Nissan’s U.S. sales.

Data from CarEdge Insights shows that current inventory for the two remains sky-high. In November, there’s a 142-day supply of the Nissan Rogue, and 153 days of supply for the Frontier. That’s 60% above the overall market average today.

Nissan has also announced plans to introduce new hybrid models to the U.S. market. The Rogue will soon offer two hybrid variants: a plug-in hybrid developed with Mitsubishi and an e-Power series hybrid. This move to expand Nissan’s hybrid lineup is intended to help the company compete in a growing market. Right now, rivals like Toyota and Honda currently lead the hybrid sector.

Is Nissan Going Out of Business?

Although it’s too soon to say whether Nissan is on a path toward bankruptcy, the company’s performance has trended sharply downward for several quarters. The good news is that Nissan’s leadership is clearly committed to reversing this trend. Uchida’s personal pay cut shows that leadership grasps the severity of the situation. Without a doubt, that’s encouraging news.

These actions indicate that Nissan is not going out of business anytime soon, but the year ahead will be absolutely crucial to its long-term survival. Stay tuned to CarEdge News for the latest automotive updates and insider car market data. 

We’ll report back if any new signs of worry arise. For now, Nissan owners should rest easy.