Nissan Posts 670.9 Billion Yen Loss, Stock Drops 3.2% Amid Restructuring

Nissan Motor Co., Ltd., a leading Japanese automaker, has announced a substantial annual net loss of 670.9 billion yen (approximately 4.5 billion USD) for the fiscal year ending March 31, 2024. This financial setback has led to a decline in the company's stock price, which dropped by 3.2% on the Tokyo Stock Exchange. The company has also decided not to disclose its operating profit forecast for the current fiscal year, adding to the uncertainty surrounding its financial outlook.

The company's decision to forgo the operating profit forecast comes amidst a broader restructuring plan. Nissan has pledged to close seven factories and reduce its global workforce by 20,000 employees. This move is part of a broader strategy to streamline operations and mitigate the impact of external factors, such as the potential imposition of tariffs on automobiles and auto parts by the United States. The company estimates that these tariffs could result in an additional loss of up to 450 billion yen, which has already been factored into its current fiscal year's operating loss projection of 200 billion yen.

The financial results for the fiscal year 2024 reveal a stark contrast to the previous year. Nissan's consolidated net sales amounted to 12.6 trillion yen, with an operating profit of 69.8 billion yen, resulting in an operating profit margin of 0.6%. The net loss of 670.9 billion yen is a significant reversal from the net profit of 426.6 billion yen recorded in the fiscal year 2023. Despite the challenging financial environment, Nissan's automotive business continues to generate positive free cash flow and operating profit.

The company's decision to close factories and reduce its workforce is a direct response to the financial pressures it faces. The restructuring plan aims to enhance operational efficiency and reduce costs, which are crucial for Nissan's long-term sustainability. The company's management has emphasized the need for a comprehensive overhaul to navigate the current economic landscape and position Nissan for future growth.

The impact of the U.S. tariffs on automobiles and auto parts has been a significant factor in Nissan's financial performance. The company has expressed concerns about the opaque operating environment created by these tariffs, which have made it difficult to predict future financial outcomes. The decision to close factories and reduce the workforce is part of a broader strategy to mitigate the impact of these external factors and ensure the company's financial stability.

Nissan's financial challenges are not unique in the automotive industry. Other major automakers have also faced significant financial setbacks due to the U.S. tariffs. The company has delayed the release of its financial forecast for the fiscal year 2025 due to the uncertainty surrounding the tariffs.

In conclusion, Nissan's decision to close factories and reduce its workforce is a strategic response to the financial challenges it faces. The company's financial performance for the fiscal year 2024 highlights the significant impact of external factors, such as U.S. tariffs, on its operations. Nissan's restructuring plan aims to enhance operational efficiency and reduce costs, which are crucial for the company's long-term sustainability. The company's management has emphasized the need for a comprehensive overhaul to navigate the current economic landscape and position Nissan for future growth.