Reflecting on the past year, Nissan has grappled with significant challenges in the Chinese market, emerging markets, and its largest market, the U.S., pushing the company into a deep crisis across multiple fronts.

Intense competition from Chinese automakers, losing ground in the global electrification race, and strategic missteps in the U.S. market collectively contributed to Nissan's operating profit plummeting 90% year-on-year and net profit declining by 94% in the first half of fiscal year 2024 (April to September 2024).

The Financial Times of the UK cited sources in November 2023 stating that Nissan had merely "12 to 14 months to survive."

However, Nissan dismissed these claims as "speculation." Brian Brockman, Nissan's vice president of communications for the U.S. and Canada, emphasized, "We continue to maintain strong asset liquidity and are making strides in investing in new products and technologies."

Nonetheless, during a briefing to investors following the announcement of its fiscal year 2024 first-half results, Nissan revealed plans to restructure its senior management, lay off 9,000 employees, and cut production by approximately 20%. CEO Makoto Uchida took a 50% pay cut, and other executive committee members will also face salary reductions, although specific details were not disclosed.

Felipe Munoz, a global auto analyst at JATO Dynamics, a research firm in the automotive industry, commented, "These are desperate measures. Post-pandemic and amid the semiconductor shortage, Nissan was unprepared for the new reality, allowing Chinese automakers to take the lead."

However, Nissan's predicament is not entirely hopeless, as the company still retains certain advantages.

In the U.S. market, for instance, Nissan boasts six models priced below $30,000, a distinct advantage considering the average transaction price for new cars in the U.S. is nearly $50,000.

"If Nissan can carve out a valuable niche market, offering affordable yet reliable cars for first-time car buyers or new families, I believe it's a winning strategy in the market," said Allen Haig, founder and president of investment bank Haig Partners.

Haig added, "We've faced similar situations with Nissan before. I believe that Infiniti and Nissan have the resilience to survive this tough period, especially if they can secure a strategic partner."

A potential merger with competitor Honda might be Nissan's best, and possibly only, chance for survival.

Image courtesy of Nissan