Published by Global Banking & Finance Review®
Posted on May 15, 2025
5 min readLast updated: January 23, 2026
Add as preferred source on GoogleNissan's new CEO faces challenges in reversing sales declines amid cost cuts, tariffs, and competition. New hybrid models are part of the strategy.
By Daniel Leussink
TOKYO (Reuters) -Nissan's new chief executive Ivan Espinosa faces an uphill task turning around the troubled Japanese automaker with no guarantee it can reverse sliding top-line sales, analysts said, even as he moves to slash costs.
With a lack of fresh models, new tariffs in its biggest market, and sharp competition from local and Chinese rivals, Nissan will be hard-pressed to shore up sales, which have plunged 42% since the 2017 business year.
Espinosa unveiled plans on Tuesday to cut 11,000 more jobs and shut seven plants and flagged that sales volume was expected to drop 3% in the current fiscal year, as performance in its key markets continues to come under pressure.
It expected sales in China to plunge 18%, while sales in North America and Japan are projected to stay nearly flat.
"They don't have a hybrid lineup. Their BEVs are not particularly successful," said Julie Boote, an analyst at research firm Pelham Smithers Associates, referring to battery-powered electric vehicles and Nissan's offerings in the U.S.
"They will have to work on new model launches, but that takes time, and there's no guarantee that they will be more successful than before."
Espinosa has promised to dramatically shorten vehicle development times and centre its strategy in the U.S., its most important market, around crossovers and sport utility vehicles.
"We understand that a sustainable recovery cannot rely solely on cost reductions. It must also be supported by strong product offerings," he said.
As part of the strategy, Nissan will start offering a plug-in hybrid version of the Rogue SUV, its top-selling U.S. vehicle, in North America this fiscal year by jointly developing it with its partner Mitsubishi Motors.
Another hybrid version of the vehicle will be launched in the next fiscal year and will be equipped with Nissan's e-Power hybrid technology.
Boote said she was not convinced of the strategy's success, cautioning plug-in hybrids do not generate the same level of demand as pure hybrid models.
"They will need to introduce attractive products to achieve this goal," said Masahiro Akita, a senior analyst at Bernstein, referring to expanding its top line growth.
TARIFF AND MARGIN CHALLENGES
New U.S. tariffs on imported cars and car parts complicate Nissan's plan to keep its sales decline at just 3% to 3.25 million vehicles in the current business year and its need to turn around shrinking margins.
Not only do the tariffs mean it may have to hike selling prices in the U.S., but they also raise input costs for its manufacturing plants there.
Sales in the U.S. rebounded to about 938,000 vehicles in the last business year, but the gain was largely driven by lower-priced, smaller vehicles such as the Mexico-imported Sentra and Versa.
Nissan's operating profit margin for the North America region worsened to negative 0.5% in the business year just ended from 4.6% in the previous period, even as it sold more cars there.
The company, which imports less than 45% of its total U.S. sales from Mexico and Japan, expects U.S. President Donald Trump's tariffs could cost it 450 billion yen ($3.1 billion) in the current business year.
Margins are also under pressure as Nissan boosts incentives to reduce inventories of ageing vehicle lineups.
At the same time it faces growing competition from not just nimble Chinese EV makers such as BYD but also from domestic rivals, analysts said.
Its smaller rival Suzuki, for example, outsold Nissan in the first three months of 2025, on course to replace it as Japan's third-biggest automaker behind Toyota and Honda this year.
GETTING SMALLER
Reflecting its worsening fortunes, Nissan is the worst performing stock among Japanese major automakers, down 29% so far this year lagging a 5.5% drop in the broader market.
There is no buy or strong buy recommendation on Nissan shares among 18 analysts covering the automaker, and half of them recommend sell or strong sell, according to LSEG data. Three months ago, there was one buy recommendation.
Espinosa took over the helm of Nissan last month from his predecessor Makoto Uchida following failed merger talks with bigger rival Honda earlier this year that would have created the world's fourth-largest automaker.
Analysts have said Nissan, among its many missteps, is paying the price for years under former Chairman Carlos Ghosn, where it focused too heavily on sales volume and used heavy discounts to keep cars moving off lots.
That has tarnished its brand and left the firm with an ageing line-up that it is now scrambling to update.
Boote worried that Nissan may not be able to hold out if Trump's tariffs on autos and auto parts remain in place over multiple years.
"The question is: Will they have time to turn around the business while having to deal with higher input costs?" she said.
($1 = 145.8800 yen)
(Reporting by Daniel Leussink; Editing by Miyoung Kim and Sonali Paul)
The article discusses Nissan's efforts to turn around declining sales through cost cuts and new strategies amid market challenges.
Nissan faces declining sales, new tariffs, and increased competition from local and Chinese rivals.
Nissan plans to cut jobs, shut plants, and focus on new hybrid models, particularly in the U.S. market.
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