Summary
- Nissan experienced a 90% profit decline in the first half of 2024, highlighting deeper issues, including weak demand and operational inefficiencies.
- The company is losing market share to stronger rivals in the U.S., China, and Europe, especially in the EV segment.
- Infiniti struggles to compete, and the discontinuation of key models reveals Nissan’s market misalignment.
- Partnerships, such as with Honda, and revamping the Renault-Nissan-Mitsubishi alliance offer growth opportunities.
- Nissan needs more innovative EVs, strengthening the ICE lineup, and investing in R&D to stay competitive in a rapidly evolving market.
Not so long ago, Nissan played with the big boys in Japanese car manufacturing, such as Toyota and Honda. Nissan used to be a bigger, more reputable, and even exciting company at times with innovative models like the Leaf, the world’s first series-produced battery electric car, the supercar killer, the GT-R, and a luxury brand—Infiniti—that went neck and neck with Lexus and Acura; today Nissan is a shadow of its former self. With profits plunging throughout 2024, Nissan is navigating turbulent waters.
The ripple effects of the Carlos Ghosn scandal, a lagging EV strategy, and growing competition from traditional and emerging players in the automotive landscape have left Nissan at a critical juncture. However, despite the numerous challenges, the Japanese automaker still has a shot at survival and maybe even reclaiming its place on the global stage by joining forces with other companies but, most importantly, by realigning and innovating again.
The Crisis at Hand
2024 was more than just a bad year for the front-page struggles at Nissan. The Japanese automaker watched its operating profits dive by a whopping 90% in the first half of fiscal year 2024, but that is only half the story. Years of declining sales, swelling debt, and an unexciting product lineup have brought this company to a fork in the road. This isn’t a bump in the road; it’s a detour, and Nissan needs to recalculate its route quickly.
A significant factor in Nissan’s turmoil is the ripple effect of the Carlos Ghosn scandal. Once a titan in the automotive world, Ghosn’s downfall created a leadership vacuum, sowing mistrust among stakeholders and employees alike. This instability made it harder for Nissan to focus on innovation and strategy.
If anything, the company has been reducing production and laying off employees to cut costs. Necessary as these moves may be, they are in many ways symptoms of deeper problems: weak demand and operational inefficiency. The lineup of products that once boasted strong sellers like Altima and Rogue has struggled for attention in an increasingly competitive market. Simply put, cost-cutting measures alone cannot solve Nissan’s multifaceted crisis.
Facing Global Competition
Nissan’s position in key markets reflects the intense competition in the auto sector: its sales in the United States have gradually declined, and its flagship models are barely able to keep up with competitors. In China, the world’s biggest auto market, Nissan is losing out to local carmakers who have taken huge leaps in quality and affordability. It’s a little different in Europe, where the Nissan crossovers that were once best-sellers just can’t stand out among more exciting choices offered by rival manufacturers.
Notably, the Chinese players are also seriously contesting for attention, especially with some of the great electric models from such brands as BYD and Geely; thus, Nissan is falling behind further than ever in many years. Meanwhile, Toyota and Hyundai have also positioned themselves at the forefront in both hybrid and EV technologies while remaining competitive in a fat share of conventional ICE vehicles; Nissan’s strategy, by comparison, feels fragmented.
Even Nissan’s luxury brand, Infiniti, is struggling to establish itself with sales down 10.2% with 58,070 units sold compared to 64,699 in 2023. Once a formidable rival to Lexus and Acura, Infiniti today faces dwindling sales and uncertain positioning. That Nissan decided to discontinue the Titan pickup in North America only serves to underline how the automaker is struggling to cope with changing market dynamics. If Nissan doesn’t heed these competitive pressures, the road ahead will only get tougher.
It’s not all over for Nissan, though. The company has several opportunities to right the ship, but it will take some decisive action and forward-thinking strategies. One avenue could be securing a partnership or merger. The recent talks of a potential merger with Honda have raised speculation of a potential collaboration that could help both companies. Alliances with Chinese automakers might also give Nissan an avenue back into the rapidly growing EV market.
The Path Forward
The once-promising collaboration between Renault-Nissan-Mitsubishi badly needs an overhaul. While there is an alliance, over the years, much of its effectiveness has waned. Rebuilding trust and alignment between these partners could unlock new synergies, especially in sharing EV platforms and technology.
Nissan needs a product refresh, big time. A mix of cutting-edge EVs alongside some seriously refined gas-powered cars for those who still need them. Models such as the Ariya show great promise but must be followed by relentless competitive new vehicle rollouts. Another major step will be investment in R&D, mainly in battery technology.
The road ahead for Nissan will not be easy, but neither is it insurmountable. Addressing its leadership gaps, rethinking market strategies, and committing to innovation will give the company a chance to regain its standing. The key will be staying agile and willing to adapt to an industry that’s changing faster than ever.
