As Nissan navigates challenging times, the automaker has unveiled an extensive restructuring plan to ensure its long-term survival—independent of a merger with Honda. While previous discussions with Honda suggested the possibility of Nissan becoming a subsidiary, the deal ultimately fell through. Now, Nissan is forging its own path, focusing on aggressive cost-cutting measures and strategic product innovations.
Workforce Reductions and Factory Shutdowns
To streamline operations, Nissan plans to eliminate 6,500 jobs across its car and engine manufacturing plants. The first phase of layoffs will see 5,300 positions cut by the fiscal year 2025 (April 2025–March 2026), followed by an additional 1,200 job reductions by fiscal year 2026 (April 2026–March 2027). These cuts align with a broader workforce reduction strategy announced in November 2024, which targeted a total downsizing of 9,000 employees. The remaining 2,500 positions will be phased out through voluntary separation programs and the elimination of indirect workforce roles.
In addition to workforce reductions, Nissan will shrink its global production capacity by 20%, lowering output from five million to four million vehicles annually by fiscal year 2026. As part of this strategy, the company will close three manufacturing facilities. The first, located in Thailand, will shut down in the first quarter of fiscal year 2025. The identities of the other two factories remain undisclosed, but one is expected to cease operations in the third quarter of fiscal year 2025, with the final closure occurring in fiscal year 2026. Moreover, Nissan is cutting production shifts at its Smyrna, Tennessee, and Canton, Mississippi, assembly plants in the United States.
Efficiency-Driven Cost Reductions
Beyond workforce and production cuts, Nissan is implementing efficiency improvements to reduce expenses. The automaker plans to shorten its vehicle development timeline, decreasing the lead time for new models from 52 months to 37 months. Successor models will undergo an even more aggressive development cycle, requiring only 30 months—a substantial reduction of 20 months compared to current practices.
To streamline manufacturing, Nissan is pursuing a “design simplification” strategy. This initiative will initially focus on six major global models, likely leading to a more uniform design language across its lineup. Furthermore, Nissan aims to cut parts complexity by up to 70%, a bold move that could significantly lower production costs and accelerate assembly processes.
Upcoming Vehicle Launches and Technological Innovations
While cost-cutting remains a priority, Nissan is also preparing to introduce new and updated models. In fiscal year 2025, a plug-in hybrid Rogue will debut, followed by an e-Power version in fiscal year 2026. The e-Power system, similar to the Qashqai E-Power, utilizes a combustion engine solely to generate electricity, powering an electric motor rather than driving the wheels directly.
Additional models in development include the next-generation Nissan Leaf and a compact electric vehicle (EV) set to launch in fiscal year 2025. A large minivan featuring Nissan’s third-generation E-Power system will arrive in Japan in fiscal year 2026. The updated E-Power system is expected to deliver a 20% increase in fuel efficiency while reducing production costs by the same margin. In China, Nissan’s N7 electric sedan—developed in collaboration with Dongfeng—was unveiled in November 2024, marking another step in the company’s global EV strategy.
Strategic Partnerships and Future Prospects
Although Nissan and Honda have abandoned their merger plans, the two automakers continue collaborating on software and electric vehicle technologies. Meanwhile, Nissan remains open to forging new strategic partnerships that could significantly enhance its market position. While details remain scarce, speculation suggests the company may seek an alliance outside the automotive sector, potentially with a technology firm such as Foxconn.
Despite its current financial struggles, Nissan remains a formidable player in the automotive industry. While the road ahead will be challenging, the company’s aggressive restructuring and innovation-driven approach suggest a potential turnaround. Whether navigating the future independently or with a new strategic partner, Nissan appears determined to regain its competitive edge.
