Introduction

Yokohama Landmark Changes Ownership: Nissan Opts for Asset Liquidation

The global headquarters of Nissan Motor, strategically located in a prime area near Yokohama Station, not only houses office spaces but also features an exhibition hall showcasing Nissan's impressive vehicle lineup. Having relocated from Tokyo in 2009, this iconic building has now changed hands.

Nissan Motor recently announced the sale of its global headquarters for 97 billion yen (approximately 4.5 billion yuan).

The buyer is a consortium formed by the U.S. investment fund KKR and the Minth Group. Post-sale, Nissan will continue to utilize the building for 20 years through a "sale and leaseback" arrangement. The transaction, expected to be finalized in December, will yield a special profit of 73.9 billion yen for Nissan in FY2025.

A Drastic Measure Amid Financial Losses

The half-year financial report for FY2025, released alongside the announcement of the building sale, revealed a staggering net loss of 221.9 billion yen (approximately 10.3 billion yuan), a stark contrast to the profit of 19.2 billion yen recorded in the same period the previous year. Revenue saw a 6.8% year-on-year decline, reaching 5.58 trillion yen, with an operating loss of 27.7 billion yen.

This downturn did not occur overnight. In FY2024, Nissan suffered a historic net loss of 670.9 billion yen, its largest ever, marking a 257.3% year-on-year plunge from profit to loss.

One of the primary factors contributing to Nissan's predicament is the high tariff policy implemented by the U.S. Trump administration. In the first half of FY2025, tariffs alone eroded Nissan's operating profit by 149.7 billion yen (approximately 6.9 billion yuan). Nissan acknowledged in its financial report that, had it not been for the tariff impacts, the company could have achieved break-even.

The severity of Nissan's situation is further highlighted by its factory utilization rates. According to British data firm GlobalData, in 2024, Nissan's factory utilization rates in the U.S., China, and Japan stood at 57.7%, 45.3%, and 56.7%, respectively—well below the industry's generally accepted break-even point of 80%.

Behind the decline in net profit and factory utilization rates for Japanese automakers lies a drop in per-unit profit and sales volume, particularly evident in the Chinese market. In the first half of FY2025, Nissan's global sales decreased by 7.27% year-on-year to 1.48 million units, with a sharp 17.6% decline in Chinese market sales.

Nissan's challenges mirror the broader predicament faced by Japanese automakers and even the global automotive industry. In the first quarter of FY2025, Toyota's net profit dropped by 36.9% year-on-year, while Honda's fell by 50.2%.

The U.S. tariff policy has dealt a widespread blow to Japanese automakers. Media estimates suggest that Japan's seven major automakers, including Toyota and Honda, anticipate a combined reduction in operating profit of approximately 2.67 trillion yen (about 130.2 billion yuan) in FY2025 (April 2025 to March 2026), equivalent to "working for free" for the entire first quarter of the previous year.

Multinational automakers are universally feeling the "pain" of U.S. tariffs. German automakers such as BMW, Mercedes-Benz, and Audi are also under pressure.

Amid the global shift toward electrification, traditional automakers' advantages are diminishing. As an early pioneer in the electric vehicle (EV) sector, Nissan once led the industry with its Leaf model. However, insufficient subsequent investment allowed it to be overtaken by Tesla, BYD, and others in the pure EV race.

Large-Scale Restructuring and Strategic Adjustments

Faced with this crisis, Nissan has launched a large-scale restructuring plan known as "Re:Nissan," widely regarded as comparable in scale to the 1999 "Nissan Revival Plan" led by former CEO Carlos Ghosn.

The core of the plan is extreme cost reduction. Nissan aims to consolidate its global vehicle assembly plants from 17 to 10 by FY2027 and reduce annual global production capacity from 3.5 million units to 2.5 million units. Additionally, Nissan plans to lay off approximately 20,000 employees worldwide, accounting for 15% of its total workforce.

Nissan targets annual cost reductions of 500 billion yen by FY2026, along with achieving positive operating profit and free cash flow for its automotive business. To accomplish this, Nissan has established a "Variable Cost Transformation Task Force" and generated approximately 2,300 cost-reduction ideas, with over 800 already implemented.

In product development, Nissan plans to shorten research and development cycles. The first model under this initiative will see its development period drastically reduced to 37 months, while models for the Chinese market will have an even shorter cycle of 24 months. In the future, component complexity will decrease by 70%, and the number of platforms will be streamlined from 13 to 7 by FY2035.

In its global strategy, Nissan is repositioning the Chinese market as a research and development frontier and a decision-making hub for its global transformation. Ma Zhixin, Chairman of Nissan's China Management Committee, stated, "China is an indispensable part of Nissan's global plan."

In April 2025, Dongfeng Nissan launched the N7, the first new energy strategic model under the "Evolution Architecture," priced between 119,900 and 149,900 yuan. The vehicle received a strong market response, with over 10,000 orders placed within an hour of its launch, 70% of which came from new customers.

As of September 2025, cumulative sales of the Nissan N7 exceeded 32,000 units, with a single-month peak of over 6,000 units, ranking among the top sellers among joint-venture brand pure EV models.

Nissan has also significantly elevated the product definition and R&D decision-making authority of its Chinese team. In the fourth quarter of this year, Nissan plans to launch three new models primarily developed by its Chinese team: the Dongfeng Nissan N6, an all-new Teana equipped with HarmonyOS Cockpit, and the Frontier Pro plug-in hybrid pickup truck.

However, Nissan's path to recovery remains fraught with challenges.

For Nissan's newly appointed CEO, Ivan Espinosa, the situation may be even more daunting than that faced by Ghosn. During Ghosn's era, Nissan could still capitalize on globalization dividends, whereas today's global automotive market has entered a phase of intense competition for existing market share.

Nissan's financial report projects an operating loss of 275 billion yen for FY2025, with uncertain net profit expectations. Exchange rate fluctuations and tariffs are expected to cause profit losses of 115 billion yen and 275 billion yen, respectively.

As of September 30, 2025, Nissan's automotive business division held approximately 2.2 trillion yen in cash and cash equivalents, providing crucial breathing room for its large-scale restructuring. However, at the current rate of net losses, this financial cushion may not last long if not addressed promptly.

Nevertheless, Nissan's management has reiterated its goal of achieving positive operating profit and free cash flow for its automotive business by FY2026.

Other Japanese brands, such as Mazda and Subaru, have also adopted contraction strategies, cutting production capacity and adjusting market strategies to varying degrees. In contrast, Toyota's sales in China grew by 6.8% year-on-year in the first half of this year, marking its first year-on-year increase in nearly four years. This contrast underscores that, in a market downturn, strategic precision matters more than historical scale.

Nissan plans to introduce 10 new energy vehicle models to the Chinese market by summer 2027, with its new N7 model already showing initial success. In this revival blueprint, Nissan may have realized that the most critical challenge is whether this veteran automaker can truly humble itself and allow innovations from the Chinese market to inform its global strategy.