Japanese automobile mammoths, Nissan have announced that they will cut 12,500 jobs worldwide after profits dropped to almost zero.
Nissan, Japan’s second largest automobile manufacturers released this statement on Thursday. They announced that their profits were almost worn to frazzle. The made the announcement on Thursday after their operating profits dropped by 99% in the quarter compared to the previous year.
However, this does not come as a surprise. Nissan had announced that they had hit “rock bottom” in the previous quarter. Their revenue has also dropped by almost 13% when compared to the previous year. This announcement certainly reassures us that Nissan have problems which won’t go away in the near future.
The company have also stated that the number of models they produce will fall by 10% by the end of 2022. Nissan have not yet announced about the exact locations about where cuts would fall. However, in an analyst’s presentation as reported by the Financial Times, there will about 2540 cuts in India and Indonesia, 2420 cuts in USA and Mexico, 880 in Japan and 470 in Spain. There will also be 500 voluntary exits.
The Sunderland plant seems to have survived this fall, but there has been a lot of doubts regarding it. Nissan had shifted the production of the X-Trail model from the Sunderland plant. This was due to the uncertainty of Brexit and Britain’s departure from the EU. Nissan employs over 7000 people in the UK and the Sunderland plant produces around 2000 cars a day. The efficiency of the plant totally depends on smooth trade throughout Europe. The Brexit situation does not help the carmakers cause at all.
Nissan’s market share in the USA has fallen from 8.1% to 7.9%. Their sales in Europe fell by 16% compared to the last quarter this year. The company’s chairman Carlos Ghosn was arrested, and has to face legal troubles in Tokyo. The company is still trying to move on from that.
The worldwide auto-market has fallen due to slow global economy, US- China trade war and climate change. Companies will have to adapt to these new conditions otherwise they will surely fall.