By Daniel Leussink
ATSUGI, Japan (Reuters)
Nissan Motor Co. (OTC:NSANY), Japan’s third-largest automaker, is set to accelerate its vehicle development process as part of a major overhaul under incoming CEO Ivan Espinosa. The automaker aims to cut its car development timeline by nearly a third in a bid to regain competitiveness amid slumping sales and mounting financial challenges.
Nissan’s Development Time Cut: A Strategic Move
Currently, Nissan takes approximately 55 months to develop a new vehicle from scratch. However, Espinosa, the company’s current Chief Planning Officer, revealed plans to reduce this significantly.
- The first car in a family of models will now take 37 months to develop.
- Subsequent vehicles from the same family will be designed in just 30 months.
“We are slow. This is one of the things we have to face,” Espinosa admitted during a press briefing in Atsugi, Japan, highlighting the urgency to enhance operational efficiency.
Refocusing on Core Models and Key Markets
Espinosa, a 20-year company veteran, is expected to bring a product-focused approach when he assumes leadership on April 1. His strategy involves prioritizing Nissan’s flagship models and expanding their reach into multiple global markets.
Key models highlighted by Espinosa include:
- Nissan Patrol – A flagship SUV with a strong presence in the Middle East and Australia.
- Nissan Z – A sports car known for its performance heritage.
- Nissan Leaf – The company’s pioneering electric vehicle (EV), set for a major upgrade.
Espinosa emphasized the need for “five or six brand-oriented models” that define Nissan’s identity and ensure a stronger market presence.
Nissan’s Financial and Market Challenges
The restructuring plans come as Nissan faces severe financial strain and growing competition. The automaker has:
- Cut its earnings forecast three times for the current fiscal year.
- Seen its debt rating downgraded to “junk” status.
- Risks losing its rank as Japan’s No. 3 automaker to Suzuki Motor Corporation.
The company sold 3.3 million vehicles globally in 2024, a slight decline from the previous year. However, Nissan’s overall sales have plummeted by nearly 40% since 2017.
Market Struggles in China and the US
- China: Nissan has lost ground to domestic EV giants such as BYD, which now dominates the market.
- United States: The company failed to capitalize on the growing hybrid vehicle trend, falling behind rivals such as Toyota and Honda.
Despite an early lead in the EV segment with the Nissan Leaf, the company struggled to maintain its momentum, losing market share to both established and emerging competitors.
Workforce Reductions and Plant Closures
As part of its restructuring plan, Nissan announced:
- 9,000 job cuts globally.
- A 20% reduction in production capacity.
- The closure of its Thailand plant by June 2025.
- Two additional, yet-to-be-identified plant closures.
Espinosa hinted at further restructuring measures but refrained from disclosing specifics.
Potential Partnerships on the Horizon
Espinosa expressed openness to strategic collaborations with other automakers, stating:
“I’m open to Honda or other partners as long as these partners are helping us drive the vision of the business.”
This follows the breakdown of merger talks between Nissan and Honda in February 2025. The proposed $60 billion deal failed due to Honda’s insistence on making Nissan a subsidiary, which Nissan rejected.
New Vehicle Launches and Future Plans
Nissan is betting on new launches in the North American market to regain momentum. Key releases in the upcoming financial year include:
- Third-generation Nissan Leaf: A crossover variant of its iconic EV, originally launched in 2010.
- First plug-in hybrid SUV: The Rogue SUV, co-developed with Mitsubishi Motors, which combines fuel efficiency with electric performance.
These models will play a pivotal role in Nissan’s efforts to expand its footprint in the growing EV and hybrid market.
Conclusion
As Ivan Espinosa prepares to take the reins at Nissan, the automaker faces a critical juncture. With aggressive plans to reduce vehicle development timelines, expand core models, and introduce new EVs and hybrids, Nissan aims to revive its fortunes. However, the success of its restructuring efforts will hinge on its ability to regain market share in China and the US while executing its cost-cutting plans effectively.
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