Nissan Motor Co’s new chief executive, Ivan Espinosa, is confronting an increasingly grim business landscape, with the automaker facing falling sales, an ageing vehicle lineup, and mounting pressure from tariffs and rivals.
The Japanese automaker has seen its global sales plunge by 42% since its peak in 2017, and Espinosa, who took over the role last month, has set out a cost-cutting roadmap involving 11,000 job reductions and the closure of seven plants.
But analysts warn that these measures alone may not be enough to reverse its fortunes.
Sales volume to drop further, key markets’ outlook remains grim
Nissan said on Tuesday it expects sales volume to drop another 3% in the current fiscal year to 3.25 million vehicles.
The outlook for key markets remains subdued, with China forecast to decline by 18% and both North America and Japan expected to stay flat.
Espinosa aims to accelerate vehicle development timelines and concentrate on crossover and SUV models in the US, Nissan’s largest market.
A new plug-in hybrid version of the Rogue SUV, co-developed with Mitsubishi Motors, is set to launch this fiscal year.
Another variant with Nissan’s in-house e-Power hybrid system will follow in the next fiscal period.
However, analysts remain skeptical.
“They don’t have a hybrid lineup. Their BEVs are not particularly successful,” said Julie Boote of Pelham Smithers Associates in Reuters report.
“They will have to work on new model launches, but that takes time, and there’s no guarantee they will be more successful than before.”
Tariffs and shrinking margins add to pressure
Adding to the challenges is a fresh wave of US tariffs on imported cars and parts, which could cost Nissan an estimated 450 billion yen ($3.1 billion) this fiscal year.
The tariffs threaten to erode profit margins and force price hikes in an already competitive market.
Although US sales recovered to approximately 938,000 vehicles in the last business year, the gains were concentrated in low-margin models like the Mexico-built Sentra and Versa.
Despite higher volumes, Nissan’s North American operating margin fell to negative 0.5% from 4.6% a year earlier.
The company also faces pricing pressure from incentives used to move ageing models off dealer lots.
Meanwhile, competition is heating up, especially from Chinese electric vehicle makers like BYD and domestic rivals.
Suzuki, for instance, outsold Nissan in the first quarter of 2025, raising the prospect that it may overtake Nissan as Japan’s third-largest automaker behind Toyota and Honda by year-end.
Nissan stock lags peers as analysts turn bearish
The stock market has reflected investor unease over Nissan’s future.
The company’s shares have fallen 29% so far this year, making it the worst performer among major Japanese automakers.
By comparison, the benchmark Nikkei 225 index is down 5.5%.
Of the 18 analysts tracked by LSEG who cover Nissan, none currently recommend a “buy” or “strong buy.”
Nine analysts now rate the stock “sell” or “strong sell,” up from seven three months ago.
Espinosa assumed the top job following the departure of Makoto Uchida, under whom merger discussions with Honda fell through.
That proposed tie-up would have created the world’s fourth-largest automaker by volume, but talks collapsed earlier this year.
Legacy issues continue to haunt the company
Industry observers argue that Nissan is still grappling with the legacy of former chairman Carlos Ghosn, whose aggressive push for volume growth and reliance on discounting weakened the brand and left it with an outdated product portfolio.
Now, the firm must urgently rebuild its line-up and improve profitability while managing external shocks like tariffs.
“The question is: Will they have time to turn around the business while having to deal with higher input costs?” Boote said.
Espinosa’s challenge is not only to shrink the company to match lower sales volumes, but also to rebuild consumer trust and revitalize a brand that has lost its edge in key markets.
Whether the cost cuts and product strategy will be enough remains uncertain.
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