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Nissan to undertake $4.3b cost-cutting plan - report

Nissan is expecting to post an annual loss soon, and its turnaround plan could involve dumping the Datsun brand and closing a factory.

4 months ago
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Derek Fung
Journalist

Nissan will likely shutter the Datsun brand as part of a sweeping plan to trim annual costs by ¥300 billion ($4.3 billion) and turn the company back towards profitability.

A source has told Automotive News Europe about the plan, which follows a brand realignment to focus Nissan on three core markets: China, North America and Japan.

This means the Datsun brand will be wound down. The marque was relaunched in 2013 and targeted at emerging markets, such as Indonesia, Russia and India. Last year Datsun confirmed its Indonesian factory will close this year.

Developing markets across Asia will be left primarily to Mitsubishi, in which Nissan has a controlling stake. The company’s presence in Europe will reportedly lean more heavily on its alliance partner Renault.

On the flip side, the Nissan will invest more money to Infiniti. The company’s luxury brand has already withdrawn from Europe and Australia after years of dismal sales.

Nissan will also reportedly close down one manufacturing facility as part of drive to reduce overall production capacity from roughly 7.0 million cars per year to just 5.4 million.

According to Bloomberg, Nissan only utilised 65 per cent of its total production capacity last year.

Elsewhere Nissan will find other savings by cutting marketing, research and other budgets.

The new three-year plan will replace a previous revival plan, which was announced in July 2019 and developed under the previous management team.

Full details about the plan will be announced on May 28 when the company reveals its results from the 2019-2020 financial year, which ended on March 31.

Nissan has warned it expects to make a loss for the financial year just passed.

Given he sharp downturn in car sales due to the coronavirus pandemic and costs associated with closing down a brand and a factory, it’s likely Nissan won’t head back into the black this financial year.