Nissan Reports Q1 Loss Due to US Tariffs and Lower Sales

Nissan reported a Q1 operating loss of 79.1bn yen ($534.57m), its first quarterly loss in over 4 years, due to US import tariffs and lower sales volumes. The loss was narrower than an average estimate of a 123.9bn yen loss and compared to a forecast of a 200bn yen loss the company had released in May.

Nissan Motor Co. Ltd. reported a Q1 operating loss of 79.1 billion yen ($534.57 million), marking its first quarterly loss in over four years. The loss, which was narrower than the average estimate of 123.9 billion yen, was primarily attributed to US import tariffs and lower sales volumes. This financial setback comes as the automaker continues to navigate a challenging business environment.

The company's operating loss was significantly narrower than the forecasted 200 billion yen loss that Nissan had released in May. The improved performance can be attributed to the company's efforts to streamline operations and reduce costs under its "Re:Nissan" recovery plan. This plan includes simplifying operations, reducing global production capacity, and consolidating manufacturing sites.

One of the key operational changes is the closure of Nissan's CIVAC plant in Cuernavaca, Mexico, by March 2026. This decision is part of Nissan's broader strategy to consolidate its production facilities and modernize its equipment. The closure of the CIVAC plant, which began operations in 1966, will result in the transfer of production of models such as the NP300, Frontier, and Versa to the Aguascalientes facility.

Despite the operating loss, Nissan's financial position remains challenging. The company has raised $4.5 billion through a mix of U.S. dollar and euro bonds to help pay down its existing debt. This debt load of approximately 700 billion yen ($4.76 billion) is due this fiscal year, and the company continues to hold junk credit ratings from all three major agencies.

Nissan has also faced delays in the launch of two U.S.-bound electric SUVs, now expected to arrive in late 2028 or early 2029, and suspended vehicle shipments to Canada following the implementation of a new 25% auto export tariff. Additionally, the company has removed two EV models from its U.S. lineup and paused construction of a planned South Carolina factory.

The company's shares have declined 27.6% so far in 2025, reflecting the market's concerns about the company's financial health and operational challenges. Despite these challenges, Nissan remains committed to its long-term strategy and plans to continue investing in electric vehicle technology and sustainable mobility solutions.

References:
[1] https://www.etnownews.com/markets/asian-paints-shares-up-2-after-q1-results-but-why-are-brokerages-not-impressed-article-152372291
[2] https://stocktwits.com/news-articles/markets/equity/nissan-to-close-its-first-overseas-plant-after-60-years/choQmyZR5y8