Japan Nissan Withdraws from Korea Due to Unbearable Performance Decline (Comprehensive)

[Image source=Yonhap News]

[Asia Economy Reporter Onyu Lim] Nissan of Japan, which recorded a net loss for the first time in 11 years, is withdrawing from South Korea due to deteriorating performance.

According to Kyodo News and Nihon Keizai Shimbun on the 28th, Nissan has decided to withdraw from the South Korean market. It has also tentatively agreed to close its factories in Indonesia and Barcelona, Spain. It is also reported that the company will downsize its operations in some ASEAN (Association of Southeast Asian Nations) regions.

All these decisions were made as part of a restructuring plan. Nissan recorded a net loss of 671.2 billion yen (approximately 7.7185 trillion KRW) on a consolidated financial statement basis for the fiscal year 2019 (April 2019 to March 2020). In the previous year, it recorded a net profit of 319.1 billion yen (approximately 3.6705 trillion KRW), but it reversed to a huge deficit. This is the first time in 11 years that Nissan has posted a net loss in its annual financial results since the impact of the Lehman Brothers bankruptcy in 2008.

The Nihon Keizai Shimbun analyzed that the decline in global sales due to the spread of the novel coronavirus infection (COVID-19) was one of the reasons behind Nissan's deteriorating performance. According to the Asahi Shimbun, Nissan's sales volume in 2019 decreased by 10% in Japan and by 14% and 19% in the United States and Europe, respectively.

Nissan plans to present a new mid-term management plan by 2023 and reduce its global production capacity by 20% to adjust to an annual level of 5.4 million units.

This content was produced with the assistance of AI translation services.