Nissan will work with its partner Mitsubishi Motors to build a plug-in hybrid version of the Rogue SUV, the best-selling car in the US.
Nissan‘s new chief executive needs to accelerate a bit more in this uphill climb of turning around the sliding top-line sales of the troubled carmaker. Even as he cuts costs, there is no guarantee of reversing it.
There are many speed bumps in its path: no new models released, new tariffs in the market, and heavy competition from local and Chinese carmakers. It seems like a never-ending list.
It will be tricky to U-turn the sales back up, which plunged 42% since the 2017 business year.
Espinosa put up a master plan to close seven plants and lay off 11,000 employees, as performance in its markets continues to take a back seat, with the expectation that sales volume would decline by 3% during the current fiscal year.
Sales in China will fall 18%, and sales in North America and Japan will remain almost unchanged.
Everything it does seems to be failing, as Julie Boote, an analyst at research firm Pelham Smithers Associates, claims that their BEVs are not working, referring to the battery-powered cars and the company’s products in the US.
She adds that there is no assurance that they will be more successful than in the past, even if they work on releasing new models, which take time.
Espinosa promised to reduce the time to launch new cars and focus on sports utility cars and the United States, its most significant market.
He recognised that cost reduction would not be sufficient for sustained recovery, and it needs to be supported by strong product offerings.
As part of its plan, Nissan will work with its partner Mitsubishi Motors to build a plug-in hybrid version of the Rogue SUV, the best-selling car in the United States, and start selling it in North America.
The company will launch a second hybrid model with Nissan’s e-Power-hybrid technology in the next fiscal year.
Boote was not convinced by the strategy, cautioning that plug-in hybrids do not create the same degree of demand as pure hybrid vehicles.
According to Masahiro Akita, a senior analyst at Bernstein, they need to launch attractive products to improve their top-line growth.
The new US tariffs on imported cars and car parts make it more difficult for Nissan to turn around declining profitability and maintain a 3% drop in sales to 3.25 million vehicles in the current fiscal year.
However, US sales increased to over 938,000 vehicles in the most recent fiscal year. The credit goes to smaller, affordable cars like the Sentra and Versa (imported from Mexico).
Nissan’s operating profit margin declined to minus 0.5% in the most recent financial year from 4.6% in the prior year, even as it sold more cars in North America.
The company, which imports less than 45% of the US total sales from Mexico and Japan, estimates that Trump’s tariffs could cost 450 billion yen ($3.1 billion) in the current fiscal year. Experts note it is also getting competition from EV makers such as BYD.
For example, Suzuki, a smaller competitor, overtook Nissan in sales in the first three months of 2025 and is on its way to replacing it as the third largest carmaker in Japan, behind Toyota and Honda.
Nissan is the worst performing stock among other Japanese carmakers. It has lost 29% of its value this year, lagging a 5.5% decline in the broader market.
After the famous unsuccessful merger negotiations with Honda earlier this year that would have made Nissan the fourth-largest carmaker in the world, Espinosa succeeded his predecessor, Makoto Uchida, as CEO of Nissan last month.
According to some analysts, Nissan is now paying for its mistakes made under former Chairman Carlos Ghosn, who focused on sales volume and used heavy discounts to keep moving the cars from the shelf, among other mistakes.
That has damaged the company’s reputation. Boote was concerned that if Trump’s tariffs on cars and auto parts exist for several years, Nissan might not be able to survive.
Will Espinosa turn the business around this time with all the speed breakers along its path?
