Nissan, the once proud Japanese automaker, is facing stormy seas as it continues to battle downturning sales and heightening competition. Ivan Espinosa, who assumed leadership of the firm in April, intends to meet these challenges head-on. Under his leadership, Nissan will need to make drastic moves to right the ship in the near term.
The automaker is under intense pressure from all angles. Perhaps most importantly, former US President Donald Trump’s 50% global tariffs on steel and aluminum have exacerbated these challenges. These tariffs are expected to raise Nissan’s cost base, affecting the company’s manufacturing competitiveness as well as its competitiveness on the model’s final market. Espinosa knows that time is of the essence. He states, “In the immediate term… we need to be focused on turning around the company.”
Nissan is bulling its way into its current conundrum. As part of the reorganization, the company announced plans to eliminate 11,000 positions and shutter seven manufacturing facilities. The entertainment industry giant has been focused on unifying its businesses to improve its efficiency and save money. To start, they’re budgeting for a 3% sales volumes decrease this fiscal year. The sales downturn could not come at a worse time, with Nissan itself doubling down on a pivot towards electrification. For one thing, they’re reacting to shifting consumer preferences and regulatory threats.
Nissan’s global competitors, especially from Chinese auto makers who are quickly and effectively growing their market share, pose a big challenge. This new competitive landscape does one more thing—it further complicates Espinosa’s goal of revitalizing Nissan. Still, he sounds hopeful for the company’s fortunes, insisting, “We are pretty convinced that the plan is sufficient and solid.”
Moreover, Nissan’s new leadership has considered various alliances to strengthen the automaker’s hand in the marketplace. In the case of last December’s rumored Nissan/Honda merger — with Nissan and Honda reportedly forming an automotive alliance — the talks continued under cover. These negotiations eventually collapsed in February, forcing Nissan to rethink its strategic path ahead.
While the automaker continues to work through these challenges, Espinosa knows he’s driving the future of Nissan. His attention right now is on realizing that plan fully – a plan that seeks to fix operational inefficiencies and improve market competitiveness.