Due to fierce competition, Nissan lowered its forecast for fiscal 2024 and made efforts to electrify its vehicles

Our reporters Yin Limei and Tong Haihua report from Beijing

Nissan Motor achieved a consolidated net income of 12.686 trillion yen (about 582.78 billion yuan) and an operating profit of 568.7 billion yen (about 26.13 billion yuan) in fiscal year 2023 (April 1, 2023 to March 31, 2024), with an operating profit margin of 4.5% and a net income of 426.6 billion yen (about 19.6 billion yuan). Nissan Motor disclosed the above information on May 10.

The reporter of "China Business Daily" learned from Nissan Motor that looking forward to fiscal 2024, Nissan Motor expects net income to reach 13.6 trillion yen, operating profit of 600 billion yen, and net income of 380 billion yen, which is 10.9% lower than that of fiscal 2023. The downward revision of net income is due to Nissan's belief that the company's business is expected to continue to face intense competition and inflationary pressures.

"Through the Nissan NEXT Corporate Transformation Program, we have been strengthening our business foundation. Starting in fiscal 2024, the company has launched a new strategy, 'The Arc Nissan Arc Project', with the goal of delivering better products to our customers while achieving sustainable and profitable growth." The company will implement the best business strategy based on market conditions and customer needs, and gradually achieve this goal through a balanced product portfolio. Makoto Uchida, President and CEO of Nissan Motor Company, said.

Consolidated net income increased 19.7% year-over-year

"Nissan Motor has strengthened its business foundation by steadily advancing the key initiatives in the Nissan NEXT Corporate Transformation Plan. FY2023 is the final year of the Nissan NEXT Corporate Transformation Plan, and despite the challenging business environment, Nissan has continued to improve the quality of sales in each regional market. Nissan told reporters.

Nissan Motor announced its "Nissan NEXT Corporate Transformation Plan" in May 2020 and implemented between FY2020 and FY2023 to rationalize production capacity, optimize operations, prioritize core markets, and focus on core models and core technologies, while revitalizing the business base.

According to the financial report data, in fiscal year 2023, due to intensified market competition, Nissan's global sales will remain at 3.44 million units.

At the same time, Nissan Motor achieved consolidated net income and operating profit of 12.686 trillion yen and 568.7 billion yen in fiscal 2023, up 19.7% and 50.8%, respectively, due to logistics, the earthquake on the Noto Peninsula in Ishikawa Prefecture, and the reduction of supplier costs due to inflation, as well as related factors.

During the reporting period, Nissan's net income was 426.6 billion yen, a year-on-year increase of 92%. The net cash of the automobile business (referring to the remaining amount of the company's cash balance minus its short-term debt) was 1.546 trillion yen (about 71.02 billion yuan). Operating margin was 4.5%, an increase of 0.9 percentage points year-on-year.

In the fourth quarter of fiscal year 2023 (January 1, 2024 to March 31, 2024), Nissan's consolidated net income was 3.5 trillion yen (about 161.44 billion yuan), a year-on-year increase of 13.5%; The consolidated operating profit was 90.3 billion yen (about 4.15 billion yuan), a year-on-year increase of 3.3%; operating margin was 2.6%; Net income was 101.3 billion yen (about 4.65 billion yuan), down 5.2% year-on-year.

Based on the proportion of joint ventures in China, Nissan Motor will have an operating profit of 570 billion yen (about 26.19 billion yuan) in fiscal 2023, an operating profit margin of 4.2%, and a net income of 426.6 billion yen

(about 19.6 billion yuan).

China is one of the most important markets for Nissan. In 2023, Nissan Motor China's cumulative sales in China, including passenger cars and light commercial vehicles, will be 793,800 units. On May 8, 2024, Nissan Motor announced that from January to April 2024, Nissan Motor sold 222,000 units in China, including passenger cars and light commercial vehicles.

At the recent 2024 Beijing International Automobile Exhibition, Makoto Uchida said, "The Chinese market is changing dramatically, and Nissan needs to respond quickly and remain competitive. As a result, Nissan has developed a balanced and focused strategy tailored specifically for the Chinese market under the guidance of its new strategic plan, 'The Arc Nissan Arc Project'. We will promote it through three pillars: first, the introduction of more new energy vehicles; 2. Fully combine local advantages with global capabilities; 3. Reform the operating model. These initiatives will help us deliver on our commitment to 'In China, For China'." ”

"In the first four months of 2024, the situation in the Chinese market remains complex. At the just-concluded 2024 Beijing International Automobile Exhibition, Nissan Motor announced that by fiscal year 2026, it will replace 73% of Nissan brand products in the Chinese market and launch eight new energy vehicle (NEV) models, including five Nissan brand models. In the future, Nissan Motor will fulfill its commitment to Chinese consumers with a more balanced product lineup. Shohei Yamazaki, Chairman of the Nissan China Management Committee and President of Dongfeng Motor Co., Ltd., said.

The Chinese market is seriously involuted, and Nissan Motor is adjusting its strategy. The reporter noted that in November 2023, Dongfeng Motor Co., Ltd., a joint venture of Nissan Motor in China, released a new strategy "Qi DNA+", with "Chinese standards, Chinese speed, and Chinese assets", and continuously promote "in China, for China", and further extend the win-win value created by the Chinese market to the world, and announced that it plans to export complete vehicles from 2025, and the export target of 100,000 units will be achieved in the first phase.

“The Arc日产电弧计划”已开启

With the delivery of a "response" in fiscal 2023 with a 92% year-on-year increase in net income, Nissan will enter the "The Arc Nissan Arc Plan" cycle from fiscal 2024 onwards.

At the end of March this year, Nissan Motor unveiled "The Arc Nissan Arc Plan", which is positioned as a bridge between the "Nissan NEXT Corporate Transformation Plan" and the "Nissan Vision 2030" (the company's long-term vision).

"The Arc Nissan Arc Program" is divided into two parts. In the first part, Nissan Motor will achieve a tailored regional strategy and accelerate the transition to electric mobility by balancing the combination of electric and internal combustion engine products, sales growth in key markets, and actions to strengthen financial discipline. As a result of these initiatives, Nissan plans to increase its annual sales by 1 million units and increase its operating profit margin to more than 6% by the end of fiscal 2026. This will pave the way for the second part of the program.

The second part aims to achieve the transformation to electric drive and ensure long-term profitable growth by building smart partnerships, enhancing the competitiveness of electric vehicles, differentiating innovations, and expanding new revenue growth streams. By fiscal 2030, Nissan Motor expects to earn 2.5 trillion yen (about 119.07 billion yuan) of potential revenue from new businesses.

Nissan plans to launch 30 new models in the next three years, including 16 electrified models and 14 gasoline models, to meet the diverse needs of users in markets with different stages of electrification development. From FY2024 to FY2030, Nissan plans to launch 34 electrified models across all segments. Nissan plans to increase the share of electrified models in the world to 40% by FY2026 and 60% by FY2030.

In terms of BEVs, under the guidance of "The Arc Nissan Arc Project", Nissan will develop BEVs through a "family-oriented" model, integrate the powertrain, leverage next-generation modular manufacturing, group procurement, and innovations in battery technology, with the aim of reducing the cost of the next generation of BEVs by 30% (compared to current Nissan ARIYA models) and achieving cost parity between BEVs and ICE models by FY2030.

By adopting a "family-oriented" development model, Nissan will be able to reduce the development cost of subsequent models by 50%, reduce changes in interior and exterior parts by 70%, and shorten the development cycle by four months after the development of the family's main models. By adopting modular manufacturing, the production line will be shortened and the production time per vehicle will be reduced by 20%.

The Arc will also further promote the development of Nissan's intelligent technologies, such as the next-generation ProPILOT technology. This technology enables door-to-door autonomous driving in scenarios such as highways, highways, private homes, and parking lots.

At the same time, during the implementation period of the plan, Nissan will provide enhanced NCM lithium-ion batteries, LFP batteries and all-solid-state batteries (ASSB) to meet the needs of different consumers with diversified pure electric vehicle solutions. The performance of the NCM lithium-ion battery will be significantly improved, and the fast charging time will be shortened by 50% and the battery energy density will be increased by 50% in the case of the Nissan ARIYA model. LFP batteries, developed and manufactured in Japan, will be available soon, and the cost of the Nissan Sakura EV will be reduced by 30%. In fiscal 2028, Nissan Motor will unveil new electric models equipped with enhanced NCM lithium-ion batteries, LFP batteries, and all-solid-state batteries.

From FY2024 to FY2030, Nissan plans to stabilize the ratio of capital expenditures and R&D investments to net income at 7% to 8% (excluding battery capacity investments). In addition, Nissan Motor plans to invest more than 400 billion yen (about 19.04 billion yuan) in battery production capacity, and at the same time, steadily increase investment in electric drive products, accounting for more than 70% by fiscal 2026. Nissan also plans to maintain a healthy net cash level of 1 trillion yen (about 47.6 billion yuan) during the implementation of "The Arc Nissan Arc Plan".

(Editor: Zhang Shuo Review: Tong Haihua Proofreader: Yan Yuxia)