Japanese automaker Nissan has issued a severe profit warning, forecasting a staggering loss of up to ¥750 billion ($5.3 billion) for the 2024-25 financial year. This marks a dramatic escalation from its previous estimate of an ¥80 billion loss, reflecting deepening operational woes, slumping sales in China, and the aftershocks of U.S. vehicle tariffs.
The forecasted loss underscores the troubled road ahead for Nissan, once a symbol of Japan’s global automotive prowess and currently among the world’s top ten carmakers by unit sales.
Mounting Losses, Mounting Pressure
Nissan’s revised projection, released on Thursday, signals the automaker’s largest annual loss since the aftermath of the global financial crisis. The company cited a major asset impairment, ongoing restructuring costs, and plummeting overseas sales as key reasons for the downward revision.
“We now anticipate a significant net loss for the year,” said Ivan Espinosa, Nissan’s Chief Executive, in a statement. “Despite these challenges, we remain focused on stabilizing the company with a renewed strategy, significant financial resources, and a promising product pipeline.”
The full-year earnings for the 2024-25 period, which ended on March 31, will be officially released in mid-May.
China Slump and U.S. Tariffs Hit Hard
Nissan’s troubles in the Chinese market—a traditionally strong revenue generator—have intensified amid fierce local competition and slowing demand. Sales have plunged dramatically, particularly in the electric vehicle (EV) segment, where Chinese manufacturers continue to dominate.
Meanwhile, in the United States, which contributes around 30% of Nissan’s total revenue, a 25% import tariff imposed by the Biden administration since April has added significant strain. Nearly half of the 924,000 vehicles sold in the U.S. last year were imported from Japan and Mexico, making Nissan particularly vulnerable among Japanese automakers.
Analyst Tatsuo Yoshida of Bloomberg Intelligence warned, “If this situation goes on indefinitely, it could be a death blow for Nissan in the sense that it will run out of cash and default.”
From Ghosn to Global Setbacks
The current crisis follows a turbulent few years for Nissan, marked by the 2018 arrest of former CEO Carlos Ghosn, the COVID-19 pandemic, and the fallout from the Russia-Ukraine conflict. In 2023, Nissan slashed 9,000 jobs globally and saw a 93% plunge in first-half net profit.
Earlier this year, merger talks with Honda collapsed. Initially envisioned as a unification under a shared holding company to better compete with Tesla and Chinese EV giants, the discussions unraveled when Honda proposed turning Nissan into a subsidiary—an idea Nissan rejected.
Credit Rating Downgraded, CEO Exits
The financial strain has led to a downgrade of Nissan’s credit rating to junk status by agencies like Moody’s, citing “weak profitability driven by slowing demand for its aging model portfolio.”
Adding to the instability, CEO Makoto Uchida stepped down in March. The leadership vacuum has further unsettled investors, with Nissan shares having lost over 40% of their value in the past year.
Future Uncertain, Partnerships Possible
While Nissan remains determined to bounce back, industry watchers suggest a strategic partnership or acquisition may be its only lifeline. Rumors of tie-ups with Apple, Tesla, or even Taiwanese electronics giant Foxconn have surfaced over recent months, though no concrete deals have materialized.
For now, Nissan’s future remains clouded. With financial hemorrhaging, failed alliances, and competitive pressure mounting, the once-mighty automaker is now in survival mode, bracing for what could be its most critical chapter yet.
