The automotive industry is not spared from the economic downturn caused by the pandemic. With many assembly lines shut down, auto sales and target production numbers will certainly be hit. One automaker said to slow down and adjust manufacturing and sales projections as early as now is Nissan.
Due to the pandemic, Nissan will reportedly cut its sales target by one million units. Nissan had initially aimed to shift in the region of six million vehicles, which was the goal of then-CEO Hiroto Saikawa. Saikawa stepped down and Makoto Uchida took the helm of the company in December 2019. If this plan is put into place, Nissan is looking to shift five million cars from FY 2020-2021 onward, which means a large reduction in production.
One Nissan official said that the aim of selling seven to eight million cars is 'wishful thinking' under the current circumstances. That official also said that scaling down production now would also affect the company in 2021 and beyond. Another executive said that they might be even looking at less than five million units this year due to the massive outbreak. Nissan's spokesperson said that full details of the turnaround will be released next month.
Nissan Chief Operating Officer Ashwani Gupta was recently quoted by Bloomberg saying the company's "priority is to conserve cash while making better use of its assets instead of selling them." He also shared that the company's revamp strategy will be "purely based on prioritization and focus,” giving a glimpse of their announcement in May.
It has been a tough year for Nissan so far and it's been bumpy for the Japanese automaker since the arrest and subsequent escape of former CEO Carlos Ghosn. Profits have been down and sales haven't been the same since last year. It also faces angry shareholders amidst the slowdown of its business amid the recent outbursts during its extraordinary shareholders' meeting in February. The COVID-19 pandemic further compounded the company's struggles as of late. Nissan sales have dropped by a significant 29.6 percent during the first quarter of 2020. From 365,851 units in 2019, it's now down to 257,606 units this year.