Nissan is selling its global headquarters and trimming production as part of its recovery efforts. Although the Japanese automaker is starting to show signs of life, it still has a long way to go. Nissan is betting on new vehicles, including the next-gen LEAF, to help it turn things around.
Nissan is ramping up its recovery efforts
After reporting first-half earnings on Thursday, Nissan gave an update on its recovery efforts. As part of its comeback plan, “Re:Nissan,” the company aims to return to operating profitability and positive free cash flow by fiscal year 2026.
Despite a challenging first half, Nissan’s CEO Ivan Espinosa claimed that the company is “firmly on the path to recovery.”
Nissan’s sales revenue fell nearly 7% to 5.6 trillion yen ($36.5 billion) due to lower global vehicle sales, particularly in Japan. Espinosa said sales are improving in the US and China, with new vehicles launching, including the 2026 LEAF and the Roox kei car.
In the first half of the fiscal year, Nissan reported an operating loss of 27.7 billion yen ($180.7 million), a stark contrast from the 32.09 billion operating profit it generated in the first half of fiscal 2024.
However, the loss was significantly lower than the 180 billion yen ($1.1 billion) loss Nissan had forecast just a few months ago.
Nissan said it has identified 200 billion yen ($1.3 billion) in potential variable cost savings. It has already reduced fixed costs by over 80 billion yen ($500 million) and is on track to hit its goal of 250 billion yen ($1.6 billion) by fiscal 2026.
As part of its recovery efforts, Nissan announced it’s selling and leasing back its global headquarters in Yokohama.
With a new 20-year leaseback agreement, Nissan said it will have no impact on employees and operations at the facility. It will use the funds to support its recovery efforts.
Nissan has now closed or consolidated six of the seven planned manufacturing plants. The company said it has significantly improved efficiency, and the engineering cost-per-hour improvement is now 12%, well on its way toward its 20% goal.
Espinosa added that the second half will “bring its own hurdles,” but Nissan is confident it will “deliver even stronger results.”
Nissan confirmed it’s still on track to generate an operating profit in fiscal 2025, excluding the impact of tariffs. The company expects to take a 275 billion yen ($1.8 billion) hit from US tariffs in the fiscal year.
According to reports, Nissan is also planning to cut production of its best-selling Rogue SUV in Japan due to a supply shortage from chipmaker Nexperia. Nissan plans to cut Rogue output by about 900 vehicles, starting next week, a source told Reuters.
FTC: We use income earning auto affiliate links. More.