Nissan Motor Corporation has recently announced a net loss of Y221.9 billion ($1.4 billion) for the first half of fiscal year 2025, a stark contrast to the Y19.2 billion net profit recorded in the same period the year before. The company attributed this significant loss to underperformance in its core automotive operations and the impact of additional US tariffs on Japanese goods imposed by the Trump administration.
During the first half of the fiscal year, Nissan’s sales revenue dropped by 6.8% year-on-year to Y5.58 trillion. The company also reported an operating loss of Y27.6 billion, a substantial swing from the Y32.9 billion operating profit achieved in the previous year. Despite these challenges, global vehicle sales reached 1.48 million units in the first half.
Nissan president and CEO, Ivan Espinosa, acknowledged the difficulties faced by the company but expressed confidence in its ability to recover. He emphasized the importance of focus, discipline, and ongoing actions to overcome obstacles and deliver stronger results in the future.
Looking ahead to the full fiscal year ending in March 2026, Nissan has adjusted its revenue projection to Y11.7 trillion, a 6.4% decrease from the initial forecast of Y12.5 trillion. The company anticipates breaking even at the operating level when excluding the impact of US tariffs; however, including estimated tariffs, Nissan predicts an operating loss of Y275 billion.
To mitigate these financial challenges, Nissan is actively implementing cost-saving measures with a target of achieving cumulative savings of Y500 billion by fiscal year 2026. As part of its strategic initiative to dispose of non-core assets, the company has confirmed plans to sell its Yokohama headquarters building. Under this arrangement, Nissan will lease the building back for 20 years, allowing it to retain its head office while reinvesting the proceeds to modernize facilities and support future growth through the Re:Nissan program.
The Re:Nissan program aims to achieve positive automotive operating profit and free cash flow by fiscal 2026. Nissan has identified Y200 billion in potential variable cost savings and has made significant progress in reducing fixed costs, surpassing Y80 billion in savings in the first half of the fiscal year. The company remains on track to exceed Y150 billion in cost reductions by year-end and is confident in surpassing its Y250 billion target by fiscal 2026.
Furthermore, Nissan has made notable advancements in plant site measures, improved engineering costs per hour by 12% towards a 20% target, and significantly reduced parts complexity. Espinosa emphasized the company’s commitment to balancing optimism with prudent risk management under the Re:Nissan program, focusing on new products, key markets, and breakthrough technologies that will shape Nissan’s future.
As Nissan navigates through these challenges and implements strategic initiatives to drive growth and profitability, the company remains optimistic about its prospects for the future. With a strong focus on innovation, efficiency, and financial stability, Nissan is poised to overcome obstacles and emerge as a resilient and competitive player in the automotive industry.
