TOKYO (Reuters) – Nissan Motor Co outlined a new plan on Thursday to become a smaller, more efficient carmaker after the coronavirus pandemic exacerbated a slide in profitability that culminated in its first annual loss in 11 years.
Under a new four-year plan, the Japanese manufacturer will slash its production capacity and model range by about a fifth to help cut 300 billion yen ($2.8 billion) off its fixed costs.
It will shut plants in Spain and Indonesia, leave the South Korean market and pull its Datsun brand from Russia as part of a strategy unveiled on Wednesday to share production globally with its partners Renault and Mitsubishi Motors.
“I will make every effort to return Nissan to a growth path,” Nissan Chief Executive Makoto Uchida said, adding that the company had learned from its past mistakes of chasing global market share at all costs.
“We must admit failures and take corrective actions,” he said, adding that starting with top-level managers, the company had to break its inward-looking culture which has stymied efforts to deepen cooperation with France’s Renault.
Uchida said improving cash flow was Nissan’s biggest challenge, though the company expects to have positive free cash flow in the second half of its financial year, compared with a negative 641 billion yen in the year to March 31.
With 1.1 trillion yen in net cash in its automotive business, untapped credit lines of up to 1.3 trillion yen and about 700 billion yen in new funding since April, the automaker said it had ample cash to cushion the blow from the coronavirus.
However, Uchida and Ch