Nissan Motor Co., Ltd. has announced a financial recovery plan, Re:Nissan, under new management, while a “leaner, more resilient” business is created and key initiatives reassessed.

Plans include reducing parts complexity by 70%, while the integration and optimization of platforms will decrease the number of platforms from 13 to seven by fiscal year 2035.

“Re:Nissan clarifies the necessary steps to recover performance and establishes clear timelines following a comprehensive review of the company’s current situation,” states a press release from the OEM. “Although the targets are ambitious, the strategies and actions are well-defined. Nissan remains committed to the steady implementation of this plan to recover performance.”

Nissan says it will advance its efforts to significantly shorten the development lead time of the first vehicle to 37 months and subsequent family vehicles to 30 months. Models developed under this process include the all-new Nissan Skyline, C SUV, and Infiniti compact SUV.

“In the face of challenging fiscal year 2024 performance and rising variable costs, compounded by an uncertain environment, we must prioritize self-improvement with greater urgency and speed, aiming for profitability that relies less on volume,” said Ivan Espinosa, Nissan president and CEO, in the release.

“As new management, we are taking a prudent approach to reassess our targets and actively seek every possible opportunity to implement and ensure a robust recovery. Re:Nissan is an action-based recovery plan that clearly outlines what we need to do now. All employees are committed to working together as a team to implement this plan, with the goal of returning to profitability by fiscal year 2026.”

Nissan says its market approach has been redefined to better match local customer needs and tailor product strategy to align with its updated market approach.

“Nissan is reshaping its product strategy to be more market-focused and more brand-oriented,” the release states. “Commitment to innovation will accelerate, bringing exciting advancements to valued customers. It will be centered around signature Nissan models that deliver strong nameplates which represent the heartbeat of Nissan globally, volume-driving models that will be the key drivers of the company’s performance and growth.

Key markets for the approach will be the U.S., Japan, China, Europe, Middle East, and Mexico.

In the U.S., Nissan will address rapidly expanding segments such as hybrids, and revitalize the Infiniti brand through synergies with the Nissan brand, according to the release.

Under the new plan, Nissan has set an aggressive cost reduction target of 250 billion yen ($1.7 billion) by accelerating engineering and cost efficiencies while implementing a rigorous governance model, the release states. A dedicated cross-functional transformation office staffed by around 300 has been established to make cost decisions.

Nissan says it expects a cost savings of 500 billion yen ($3.4 billion) versus fiscal year 2024 actuals in fixed and variable cost savings, which will establish a framework to secure operating profitability and free cash flow in the automotive business by fiscal year 2026.

Advanced and post-fiscal year 2026 product activities will be temporarily paused so 3,000 employees can focus on cost reduction initiatives, the release states.

“This reprioritization was made possible through the company’s swift implementation of a shortened development process that reduces lead time and ensures no delays in product launches,” Nissan says in the release. “A key aspect of this transformation involves rethinking the supply chain; Nissan will restructure its supplier panel to secure more volume for fewer suppliers, eliminating inefficiencies and challenging legacy standards.”

Nissan will consolidate its vehicle production plants from 17 to 10 by fiscal year 2027, and streamline its powertrain plants, plus accelerate job reformation, work shift adjustments, and capital expenditure reductions. That includes doing away with plans to open a lithium iron phosphate battery plant in Kyushu, Japan.

Workforce will be reduced by 20,000 between now and 2027, including the previously announced reduction of 9,000.

“This workforce reduction globally covers direct/ indirect roles and contractual roles in manufacturing, SG&A, and R&D functions,” Nissan said. “Additionally, Nissan will implement further measures under SG&A, including expanding the scope of shared services and identifying efficiencies in marketing.”

The automaker will also revamp its development processes by reducing engineering costs, complexity, and improving development speed. By rationalizing global R&D facilities and allocating work to competitive locations, Nissan aims to reduce the workforce’s average cost per hour by 20%.

Nissan plans to collaborate with its partners to deliver models that complement its portfolio and meet unique market needs, such as through its projects with Renault and Mitsubishi Motors (MMC) that are underway. The MMC project includes an all-new battery electric vehicle (BEV) based on the next-generation Leaf for the North American market.

Nissan and Honda will continue their collaboration in vehicle intelligence and electrification.

In February, Nissan, Honda, and MMC agreed to terminate a memorandum of understanding (MOU) to consider a tripartite collaboration.

Nissan and Honda signed the memorandum in December “to start discussions and considerations toward a business integration” between the two companies via the establishment of a joint holding company.

According to Nissan and Honda, an MOU signed March 15, 2024 was meant to establish a strategic partnership “to further accelerate their efforts toward achieving a carbon-neutral society and a zero-traffic-fatality society.” Then, on Aug. 1, the companies signed another MOU “to deepen the framework of the strategic partnership” and announced they would jointly research fundamental platform technologies for next-generation software-defined vehicles (SDVs). The focus was to be on the areas crucial for intelligence and electrification.

Mitsubishi, a Nissan alliance member, signed a separate MOU with Nissan and Honda to explore its possible “participation, involvement, and synergy sharing” as part of the joint holding company.

“Going forward, the three companies will collaborate within the framework of a strategic partnership aimed at the era of intelligence and electrified vehicles,” a February press release from Honda states. “This framework was established with the MOU signed on August 1 last year, striving to create new value and maximize the corporate value of each company.”

Also earlier this year, Nissan announced a vehicle technology advancement in autonomous driving collision avoidance. The OEM plans to launch its next-generation ProPilot technology during fiscal year 2027.

The system will feature next-generation lidar and Wayve AI Driver software, built on Wayve’s embodied AI foundation, to handle highly complex real-world driving conditions in a human-like manner, according to a press release from Nissan.

The software’s ability to efficiently and rapidly learn from vast amounts of data “ensures a continuous advantage to Nissan vehicles for the future,” the release states.

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Featured image provided by Nissan