Nissan in trouble and the COVID pandemic adds to their misery

This is not a new fact, Covid 19 has proven to be quite ruinous for the industries in the world, more specifically, the auto industry. This has led to many motor brands temporarily shutting down their production plants, and sitting tight until the Coronavirus storm blows over. Some brands can afford to do so, while some. who were in a bad position (financially) before the Covid 19 crisis, are now being forced to ask themselves some hard questions, which have even worse answers.

Nissan, very well known for their vehicles like the 370Z, GT-R and immortal Skyline has hit a wall, and if they want to have a future, they will have to take a few decisions which they may not be proud of making. Before the world had suffered from Coronavirus, Nissan had their own troubles to deal with as the company had been struggling with sales, and they were running out of capital at a fast pace.

Nissan would have been hoping that with the start of new year, they could hope for more sales, but 2020 in itself has started off on a bizarre note, and Nissan cannot afford to hope anymore. Nissan has reached a point, that they are compelled to downsize and reduce their sales targets by at least a million units.

It feels very odd to read that a motor brand wishes to reduce their sales, but that is what Nissan must do to survive. They had forced their working staff to take unpaid leaves in the month of January as they needed to save cash. As wrong as it may seem, this has been their state for the last few months, and it appears that the road ahead of Nissan is a rough one.

Nissan aim to introduce a new plan by May, which would pertain to a new restructuring plan, and the main objective of this plan would be to sell 5 million cars annually, which is a million lesser than what their initial sales targets were.

This plan is believed to be implemented from 2020 and would carry on till March 2023, and this plan will also lead to 3 or more production plants and a few dealerships being shuttered. Such closures would result in thousands of employees losing their jobs, and this mass ‘letting go’ of employees could not have come at a worse time.

Reports suggest that if the Covid 19 crisis continues to make life difficult for them, they could further reduce their expected sales target. Till date, Nissan has engaged in ‘wishful thinking’, and have believed they could sell 7/8 million units of cars, but would attain sales of not more than 5 million.

It seems natural that Nissan’s new objective is to save cash, and to do so, they need to engage in a sound and safe strategy. They are no more in a position to indulge in ‘wishful thinking’, and have to make sure that they are able to accomplish their sales targets. Nissan is now grasping at recovery, but their hold upon it is a weak one. I hope they are able to turnaround from their current predicament, because the last thing I want is, a company like Nissan which has so much history, to lose itself.

With respect to the Indian markets, Nissan is placing all its hopes on their new compact SUV ‘Magnite’ which will be a direct competitor to the Maruti Brezza, Hyundai Venue, Mahindra XUV 300 and Tata Nexon. Nissan is really banking on this car, as their sales in India have seen a 52% drop, and if this kind of a performance continues, they could be looking at a very grim future.