Nissan Projects Record Loss of Up to 7.5 Trillion Won Due to Additional Restructuring Costs

Forecast Revised Downward from Previous Expectations
5 Trillion Won Loss from Asset Value of North American and Japanese Plants
Production Capacity Down 20%, 9,000 Jobs Cut

On April 24, Japanese automaker Nissan Motor Co. revised its net profit forecast for fiscal year 2024 (April 2024 to March 2025), lowering it to a net loss of 700 billion to 750 billion yen (approximately 7 trillion to 7.5 trillion won), according to reports from Kyodo News and Nikkei.

Passenger cars of Nissan Motor Co. waiting to be shipped for export. Photo by Bloomberg

If this forecast proves accurate, it would mark Nissan's largest-ever loss, surpassing the previous record of 684.4 billion yen (approximately 6.9 trillion won) in 1999.

Nissan had originally projected a net loss of 80 billion yen (approximately 800 billion won) for fiscal year 2024. Nikkei explained that the significant increase in projected losses is attributed to a reassessment of asset values and restructuring efforts. The newspaper reported that Nissan incurred a loss of 500 billion yen (approximately 5 trillion won) as a result of reassessing the value of assets such as its North American and Japanese plants, and that an additional 60 billion yen (approximately 600 billion won) in restructuring costs was incurred due to workforce reductions. In this regard, Nissan President Ivan Espinosa stated, "We have thoroughly reviewed and adjusted the value of assets related to production," adding, "We are committed to rebuilding the company with strong determination."

Nissan, which has been experiencing poor business performance, announced in November last year that it would reduce production capacity by 20% and cut 9,000 jobs. Nissan also entered into talks with Honda regarding a management integration in December last year, but the merger fell through due to differences over Nissan's restructuring plans and the integrated management structure.

Nissan is scheduled to announce its fiscal year 2024 financial results on May 13.

Meanwhile, Hino Motors, a commercial vehicle manufacturer, announced that it recorded a net loss of 217.7 billion yen (approximately 2.2 trillion won) for fiscal year 2024. NHK reported that this was due in part to large penalties paid in the United States related to certification fraud issues. Hino Motors is currently in discussions to integrate management with Mitsubishi Fuso Truck and Bus. Toyota Motor, the parent company of Hino Motors, and Germany's Daimler Truck, the parent company of Mitsubishi Fuso Truck and Bus, plan to establish a new holding company under which both Hino Motors and Mitsubishi Fuso Truck and Bus will be placed.