The company reported an operating loss of 40.5 billion yen ($ 376 million) for the fiscal year ended March, compared with an operating profit of 318 billion yen ($ 2.9 billion) for the fiscal year previous one. It was the worst performance of the company since 2009.
There may be more pain coming. Given the uncertainty surrounding the coronavirus pandemic, “it is difficult to reasonably predict a prospect for fiscal year 2020 right now,” CEO Makoto Uchida told a profit presentation Thursday.
The world’s largest automotive alliance added that it would abandon the growth at all costs of the strategy pursued by former chief Carlos Ghosn, whose arrest in 2018 on allegations of financial misconduct threw the group into disarray. Ghosn denied any wrongdoing.
The new strategy boosted Nissan’s shares, which rose 8% in Tokyo on Thursday before earnings were released. Shares are down 29% for the year.
Nissan said the review would allow it to cut costs by 300 billion yen ($ 2.8 billion). The company will reduce the number of models it manufactures from 69 to less than 55, will exit the South Korean market and close its vehicle manufacturing plant in Barcelona.
The Spanish government has said it “regrets” Nissan’s decision and will try to convince the company to keep the plant open, the Ministry of Industry said in a press release.
Nissan has said that its auto manufacturing plant in Thailand will become its sole production base in Southeast Asia after the company closed its factory in Indonesia earlier this year.
The Barcelona plant directly employs around 3,000 workers and around 20,000 other employees depend indirectly on local production, a Spanish government spokesman told CNN.
Nissan Chief Operating Officer Ashwani Gupta said the company remains committed to Europe.
“[The] United States, China, Japan are the top three markets for us in terms of market share. But Europe is very important to us because it is we who created the crossover SUV. We will concentrate it in Europe, “he told CNN.
To “share the pain” caused by the review, Uchida said he will suffer a 50% cut in the first half of the year and other executives will see a 30% cut.
– Al Goodman, Kaori Enjoji and Angus Watson contributed to this report.