Nissan is implementing immediate measures to improve its performance and create a leaner, more resilient business capable of swiftly adapting to market changes.
On February 13, it shared additional details regarding these actions, outlining targets for fiscal year 2026 and key initiatives.
Nissan president Makoto Uchida says the manufacturer aims to reduce costs by around 400 billion yen.
“We are dedicated to achieving a more efficient cost structure while driving top-line growth through enhanced competitive products catering to our customers’ diverse needs,” Uchida says.
“We are executing our turnaround—centred on efficiency and growth—with pace and purpose.”
Target for fiscal year 2026
Nissan plans to optimise its cost structure and reduce fixed and variable costs by approximately 400 billion yen in fiscal year 2026. This will reduce its break-even point in the automotive business from 3.1 million to 2.5 million units, enabling a stable operating margin of 4%.
Targeting >300 billion yen fixed cost reduction
In terms of fixed costs, savings of approximately 200 billion yen are targeted from selling, general, and administrative expenses (SG&A), about 100 billion yen from restructuring the manufacturing base, and around 30 billion yen from development efficiencies.
Nissan plans to reduce its global indirect workforce by 2500 by streamlining operations, implementing hiring reductions, and accelerating voluntary separation programs. Additional measures, including expanding shared service centres by 1,000 positions and prioritising fixed marketing expenses, will also help reduce unit labour costs.
Nissan aims to save approximately 100 billion yen by consolidating production lines, adjusting shift patterns, and transferring jobs. Q1 FY25 will start with three plants: the Smyrna and Canton plants in the US and Thailand.
This rightsizing will reduce headcount in vehicle and powertrain plants by 5300 in FY25 and 1200 in FY26, for a total reduction of 6,500. These production savings will be complemented by new engineering and operational efficiencies, including the launch of new models and the reduction of CAPEX and costs for product introductions.
Regarding restructuring its manufacturing base, Nissan plans to reduce its global production capacity by 20% and optimise its manufacturing workforce by fiscal year 2026. This includes a capacity reduction already implemented in China from 1.5 million units to 1 million. It will combine with ongoing efforts to reduce capacity from 3.5 million units to 3 million units for plants outside China and increase the plant utilisation ratio from 70% in fiscal year 2024 to 85% in fiscal year 2026. In total, including plants in China, Nissan aims to reduce global production capacity from 5 million units to 4 million units by fiscal year 2026.
Nissan targets an approximately 30 billion yen cost reduction through improved development efficiency. The family development concept will shorten the time to market and reduce development costs, achieving about 20 billion yen inefficiencies. The integrated approach will be applied to ongoing projects, with the benefits realised from 2025 onwards. The first model utilising this process is set to launch in fiscal year 2026.
100 billion yen in variable cost saving
Nissan aims to reduce design-driven costs by approximately 60 billion yen, starting with simplifying design (adjusting model performance and content) across its six major global products. Various initiatives for manufacturing operational cost reductions include reducing parts complexity by up to 70%, improving production planning to eliminate supply chain inefficiencies and lower warehouse costs, and enhancing efficiency while reducing costs in after-sales parts warehousing. Through these combined efforts, Nissan targets a total cost reduction of around 100 billion yen.
Driving topline growth
To ensure revenue growth, Nissan will provide products with differentiated technologies tailored to global customer needs.
In FY24, Nissan refreshed its model lineup, offering differentiated products such as the Qashqai, Juke, Kicks, Armada, Note, Patrol, Magnite, QX80, and Murano. Each model has been renewed to maximise customer value and is essential for delivering profitable volume aligned with distinct market demands.
The company will introduce new plug-in hybrid models in FY25 and FY26 to further enhance its offerings and refresh its award-winning mini-vehicles and large minivans. Nissan will also strengthen its zero-emission EV lineup with the new LEAF, an all-new compact EV, and a new NEV targeted at the Chinese market.
Third-generation e-POWER models exemplify the contribution to sustainable, profitable growth. The third generation offers significant improvements, including 20% improved fuel efficiency and a 20% reduction in cost compared to the first generation. In particular, fuel efficiency at high speeds has been improved by 15% compared to the second generation, achieving top-class fuel efficiency in Europe and significant improvement in the US.
Nissan’s future profitability will also depend on technical innovation, with an increased focus on intelligent vehicles. Models planned for launch by fiscal year 2026 will introduce unique intelligent cockpits and driver assistance features. In the coming years, Nissan aims to democratise door-to-door autonomous driving and offer driverless mobility services in Japan, with plans for commercialisation by fiscal year 2027.
This combination of new model launches, market expansions, and strategic initiatives will drive top-line growth in fiscal years 2025 and 2026. The company plans to increase volume sales through model replacements and expansion into new segments.
Streamline organisation and processes.
Nissan’s top management will adopt a single-layer, non-officer framework to enhance decision-making speed. This will reduce top management positions by 20% and create advancement opportunities for the next generation within a streamlined, borderless organisation.
The company will also simplify organisational layers and expand the span of control to improve decision-making efficiency. Additionally, roles and management positions will be evaluated and reclassified in alignment with business objectives under a new unified global system. By establishing clear roles and responsibilities between international and regional functions, Nissan aims to create a leaner global headquarters with centralised upstream functions and decentralised downstream functions, empowering regions to enhance operational efficiencies.
Business and portfolio restructuring; asset optimisation
By seizing every opportunity for improvement, Nissan will build on its current measures to proactively advance its next restructuring phase. It will review its market presence and determine where to remain, outlining an operational strategy for the rest of the markets. The company will also optimise core products, platforms, and powertrains to prioritise and streamline investments. Meanwhile, Nissan will accelerate collaborative projects with its Alliance, Honda, and other partners.
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