Nissan Launches Cost-Cutting Plan Worth 3.5 Trillion Won

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Nissan Motor plans to reduce fixed costs by approximately 300 billion yen (about 3.429 trillion KRW) due to a decline in car sales caused by the COVID-19 pandemic, Bloomberg reported on the 13th.

According to Bloomberg, citing sources, "Nissan will achieve this goal by gradually phasing out the Datsun brand, closing one additional production line besides the recently closed Indonesian line, and cutting marketing and other research and development expenses."

Nissan's management has been paralyzed since the arrest of former chairman Carlos Ghosn in November 2018. Additionally, Nissan closed major car showrooms in key markets last month due to COVID-19. The resulting impact has dampened new car demand, and the company has announced expected losses for the recent fiscal year ending in March.

Nissan stated that these cost-cutting plans must be reviewed by the board of directors and may be subject to change.

According to Bloomberg, Nissan's operating rate for this fiscal year is estimated at 65%. Nissan plans to reduce its operating rate from 7.2 million units annually to about 6.6 million units.

This year, Nissan's stock price has plummeted by more than 40%.

Previously, Nissan conducted temporary layoffs affecting 20,000 employees worldwide. This scale of restructuring is the first since the 2008 global financial crisis.

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