Nissan has been in rough shape.
The Japanese automaker recently told its managers to cut all-non essential spending as it works to turn around a 70 percent slight in quarterly operating profit and an 11-year low in its financial forecasts. One source told Reuters on the condition of anonymity that they should “conserve every yen”. That means slashing sales incentives, curbing promotional events and reining in unnecessary travel.
While Nissan has not officially announced the extent of the cuts, those sources emphasized that the company was not facing serious cash issues at the moment. One spokesman did say, “Given the business and operational situation we face, we’re carrying out moves to cut expenses.”
Nissan’s reported expense cuts follows its decision to furlough U.S. employees through January 2 – 3. As sales in the American market have fallen by more than 13 percent in November alone (YTD sales are down 6.5 percent), one source said the company issued an effective travel ban for its U.S. staff. Stocks fell to an eight-year low after Jun Seki, Nissan’s former vice chief operating officer, announced his departure to head up automotive supplier Nidec Corp.
Spending cuts will continue for months to come
Reuters reports that Nissan’s spending cuts will carry on through until at least March 2020. Sources even said they may go on “into the coming business year”, past the end of the current fiscal year. The report made no specific mention of downsizing, but it’s tough to see that decision as off the table when Nissan’s slashing spending to this magnitude.
The company also continues to try and modernize its lineup, with the new Sentra as its latest offering: