As the Japanese carmaker, Nissan grapples with closed factories and showrooms amid the coronavirus pandemic, it looks to cut more than 20,000 jobs across the world. The automaker warned last month it expects to post a loss for the latest fiscal year through March, as the pandemic shuttered dealerships in major markets and the economic fallout hurt consumer demand for new cars.
Nissan plans to cut about 300 billion yen (S$3.97 billion) in annual fixed costs and book restructuring charges as the pandemic further depresses the carmaker's sales, a person with knowledge of the measures said last week.
As per the report, it will phase out the Datsun brand, shut down one production line in addition to the recently closed operation in Indonesia and reach the reduced spending target this year by cutting marketing, research and other costs.
Nissan Motors is not alone, other car manufacturers also face similar challenges. The pandemic is set to exacerbate the numerous challenges already facing the auto industry, including tougher CO2 emissions standards and higher investments in new technologies. Even before the pandemic, the industry was stressed financially from increased emissions-related upgrade costs and increased R&D investments in emerging technologies. As manufacturing operations resume, the added burden of COVID-19 safety protocol compliance, plummeting demand, and inefficiencies from underutilized capacity are further exposing OEMS and suppliers to severe liquidity issues. Further disruptions are likely to continue, bringing the possibility of major consequences to specific segments of the auto ecosystem.
While the industry struggles, it has not seen major layoffs as yet. Presently, besides keeping costs in check, the companies key focus would be on slowly resuming work in factories without compromising employees’ safety.