Chief executive Makoto Uchida unveils drive to slash costs as part of final break with former boss Carlos Ghosn © Reuters

Nissan will embed its global deputy leader in its US business to oversee a turnround of its second-largest market as part of a survival strategy to scale back its international footprint and save $2.8bn of costs.

As well as putting chief operating officer Ashwani Gupta in charge of rebuilding the Japanese carmaker’s brand in the US, the company is cutting its model line-up and closing plants around the globe.

The group’s turnround plan, unveiled on Thursday, will focus on its home market, China and the US in an effort to bring back growth and reverse its largest annual loss in two decades.

The moves are in line with a new strategy outlined by the Renault, Nissan, Mitsubishi alliance on Wednesday.

“For Nissan to overcome the situation, we must admit our mistakes and correct course,” chief executive Makoto Uchida said on Thursday, while unveiling a net loss of ¥671bn ($6.2bn) in the fiscal year to March.

The new four-year plan will “ensure steady growth instead of pursuing excessive sales expansion”, he added.

As part of its US focus, Mr Gupta will be appointed chairman of a new subsidiary board to work closely with the new local management team to improve profitability.

“I’m personally going to work with the team . . . because we have to change the mindset in the US on how to sell cars,” Mr Gupta said in an interview.

Nissan’s move marks a final break from the era of former boss Carlos Ghosn that was defined by aggressive expansion, including an audacious push to capture 8 per cent of the global market.

The strategy involves closing plants in Barcelona and Indonesia, shutting a production line at its US factory in Mississippi and pulling out of the South Korean market. It also involves axing its budget Datsun brand in Indonesia and Russia.

Under pressure from a collapse in car sales that began before the coronavirus outbreak, the Japanese group has opted for a selective strategy over where to sell its cars, dropping Mr Ghosn’s global approach that once turned Nissan and partner Renault into the world’s largest car alliance.

The partnership, which also includes Mitsubishi, was on the brink of collapse following tensions after the 2018 arrest of Mr Ghosn on financial misconduct charges. Mr Ghosn denies those charges. 

But the global halt in car sales and cash drain caused by the pandemic has forced the three groups to rethink their survival strategy, with each instead focusing on technologies and markets where they are strong. 

Nissan will over the next four years cut its worldwide production capacity by 20 per cent to 5.4m vehicles, although that is still well above its annual sales of 4.9m vehicles. It will target a global market share of 6 per cent, a touch higher than its current 5.8 per cent, and will slim its portfolio from 69 models currently to 55.

Mr Uchida disclosed his strategy as Nissan withheld its guidance for the new financial year after booking more than ¥600bn in restructuring charges and impairment losses. Its automotive net cash declined by one-third to ¥1tn at the end of March. 

With more than ¥2tn in unused credit lines and new loans, the group has sufficient liquidity for the next few months. But it would “look at all possible options” including Japanese government-backed loans depending on the situation going forward, said its chief financial officer Stephen Ma.

“Cost cutting by itself is not a viable solution. It’s a start,” said CLSA analyst Christopher Richter, adding the success of Nissan’s products in the US such as the new Rogue would be key to its recovery.

Shares in Nissan have risen about 20 per cent this week on positive expectations for the strategy after previously falling heavily due to the global shutdown of car plants.

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