More on big Nissan cuts
February 10th, 2009 by Richard Aucock
NISSAN is taking dramatic steps to restructure its business, in the face of big financial losses for 2008.
‘Despite actions already taken during 2008 to respond to the global crisis,’ says a company statement, ‘worsening conditions are prompting the need for further changes…’
These will focus on the company’s cash management strategy, business structure and investment plans – and many of the initiatives will affect both how dealers work and the cars that they sell.
Nissan dealers have already experienced an immediate change. In March 2008, the Nissan company and its dealers carried 630,000 cars. By next month, this inventory will have been reduced by 20 per cent, to 480,000 cars.
A cut in vehicle production will help here, slashing a fifth from the amount of cars Nissan builds. Nissan will also save over 20 per cent in cash by cutting capital expenditure in 2008 – and a further 14 per cent in the 2009/10 financial year.
Worryingly, Nissan says labour costs in ‘high cost countries’ will be reduced by 20 per cent. It is not clear what the implications for the company’s UK plant may be here.
The unfortunately named 2012 business plan has been culled. This stated the company was to launch 60 new models between now and 2012. Today, that total has been cut to 10 cars a year.
The focus will be on small and green cars, including electric models, which means some future high performance luxury projects may now be dead in the water.
It also makes the Infiniti brand’s launch in the UK even more perilous.
But it’s the global cut in jobs that has taken most by surprise. This surpasses most job losses reported recently – and is clear illustration of the strife faced by the industry at the moment.
At least bonus payments to top bosses have been banned. However, the fear is, Nissan’s announcement may just be the tip of the iceberg…
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