On Friday, Nissan Motor's stock prices plummeted by 6% during trading in Tokyo, in response to the company's announcement of a major restructuring initiative. The renowned Japanese automaker disclosed plans to reduce its workforce by 9,000 positions and cut its manufacturing capacity by 20%, as it grapples with declining sales in China and the United States. This strategic shift follows Nissan's revision of its full-year operating profit forecast, which was dramatically reduced by 70%.

Nissan projects that the restructuring will result in cost savings of 400 billion yen (equivalent to $2.61 billion) by the close of the current fiscal year in March. The company's challenges are further intensified by the emergence of domestic competitors in China, such as BYD, which are gaining market share with their budget-friendly electric vehicles and sophisticated gasoline-electric hybrids. In the US market, Nissan faces a disadvantage due to its limited hybrid offerings, a segment that is currently witnessing a surge in demand.

Nissan's CEO, Makoto Uchida, admitted on Thursday that the company had not anticipated the swift increase in the popularity of hybrids in the US and that the demand for updated core models had been weaker than expected. This restructuring signifies the latest phase in Nissan's continuous efforts to revitalize its business, which has been in decline since the departure of former Chairman Carlos Ghosn in 2018 and the subsequent contraction of its partnership with Renault.

On Friday, when questioned about potential government support for Nissan, Japan’s Minister of Economy, Trade and Industry, Yoji Muto, offered no comment. Tokai Tokyo Intelligence Laboratory analyst Seiji Sugiura criticized Nissan's management, attributing much of the company's hybrid market challenges in the US to their strategic emphasis on new electric vehicles and conventional power models. Sugiura dismissed Nissan's mid-term plan, announced in March, as insignificant, stating, “I believe their grasp of the situation is entirely misguided.”

The mid-term plan, which aimed to introduce 30 new models over three years, boost global sales by 1 million units, and achieve total shareholder returns exceeding 30%, now seems to be at risk. As Nissan confronts these challenges, its future is uncertain, with the success of its restructuring plan being pivotal for the company's recovery and long-term sustainability.

The restructuring plan announced by Nissan Motor is a significant move in response to the company's financial struggles and market challenges. The decision to reduce the workforce by 9,000 jobs and to cut manufacturing capacity by 20% is a direct response to the company's lagging sales in key markets such as China and the United States. This move comes in the wake of Nissan's downward revision of its full-year operating profit forecast, which was reduced by a substantial 70%.

Nissan anticipates that these restructuring efforts will lead to significant cost savings, estimating a reduction of 400 billion yen ($2.61 billion) by the end of the current fiscal year in March. The company's difficulties are further complicated by the rise of competitors in China, such as BYD, which are capturing market share with their affordable electric vehicles and advanced gasoline-electric hybrids. In the US, Nissan is at a disadvantage due to its limited hybrid offerings, a segment that is currently experiencing a surge in demand.

Nissan's CEO, Makoto Uchida, acknowledged on Thursday that the company had underestimated the rapid rise in popularity of hybrids in the US and that the demand for refreshed core models had been weaker than anticipated. The restructuring marks the latest phase in Nissan's ongoing efforts to rejuvenate its business, which has been in a slump since the 2018 departure of former Chairman Carlos Ghosn and a subsequent retrenchment in its partnership with Renault.

On Friday, Japan’s Minister of Economy, Trade and Industry, Yoji Muto, offered no comment when questioned about potential government support for Nissan. Tokai Tokyo Intelligence Laboratory analyst Seiji Sugiura criticized Nissan's management, attributing much of the company's hybrid predicament in the US to their strategic focus on new electric vehicles and traditional power models. Sugiura dismissed Nissan's mid-term plan, announced in March, as meaningless, stating, “I think their understanding of the situation is completely wrong.”

The mid-term plan, which aimed to launch 30 new models over three years, increase global sales by 1 million vehicles, and achieve total shareholder returns of over 30%, now appears to be in jeopardy. As Nissan grapples with these challenges, its future hangs in the balance, with the success of its restructuring plan being crucial for the company's recovery and long-term viability.