Cheap Chinese electric vehicles are being blamed for the collapse of car manufacturer Nissan.
The Japanese auto firm, which employs 7,000 people in the UK and 17,000 in the US, has embarked on a huge cost-cutting programme after suffering heavy losses.
Nissan said last month it would axe 9,000 jobs and 20 per cent of its global manufacturing capacity, as it scrambles to reduce costs by $2.6billion (£2billion) in the current fiscal year amid a sales slump in China and the US, its two biggest markets.
The Yokohomo-based firm vowed in March to cut costs of making electric vehicles by 30pc in a fightback against the super cheap models that have been surging out of China.
Chinese brands such as BYD, Chery, Geely and SAIC Motor have been enjoying a sales boom, reported the Telegaph.
BYD, which stands for Build Your Dreams, recently bested Tesla quarterly revenue sales, Bloomberg reported, with revenue for the three months ending September 30 at $28.2 billion.
Tesla’s sales were $25.2 billion in the same period.
Nissan chief executive Makoto Uchida is taking a 50 per cent pay cut and it has now been reported that chief financial officer Stephen Ma is stepping down.
Chinese firm BYD, which stands for Build Your Dreams, recently bested Tesla quarterly revenue sales, Bloomberg reported, with revenue for the three months ending September 30 at $28.2 billion.
YD electric cars waiting to be loaded onto a ship are seen stacked at the international container terminal of Taicang Port in Suzhou on February 8, 2024
Chief executive Makoto Uchida, pictured launching Nissan’s electric vehicle Concept 20-23 in London in September 2023, has taken a 50 per cent drop in pay
But insiders fear the moves may not be enough as Nissan struggles to stay competitive with rivals who have pushed ahead more successfully with popular hybrid cars.
Mr Uchida said: ‘This has been a lesson learned and we have not been able to keep up with the times.
‘We weren’t able to foresee that hybrid electric vehicles and plug-in hybrids would be so popular.’
Forbes reported yesterday that cheap EV alternatives in China had been ‘hacking away’ at Nissan’s share.
‘The root of the problems stem from a wave of cheaper EV alternatives coming from China that are flooding the global market and stealing market share away from the Japanese company,’ the publication said.
The company risks running up its largest-ever debt by 2026, potentially owing as much as $5.6billion (£4.4billion), it is suggested.
The firm’s worldwide sales slumped by 3.8 per cent to 1.59million vehicles in the first half of the current financial year, largely driven by a 14.3 per cent fall in China.
Nissan has around 7,000 employees in the UK, including 6,000 at the country’s largest car-making plant in Sunderland.
The Financial Times quoted a ‘senior official’ at Nissan as saying: ‘We have 12 or 14 months to survive. This is going to be tough. And in the end, we need Japan and the US to be generating cash.’
Nissan’s head of manufacturing Hideyuki Sakamoto told a news conference last month: ‘Globally, we currently have 25 vehicle production lines. Our current plan is to reduce the operational maximum capacity of these 25 lines by 20 per cent.
Japanese carmaker Nissan, which employs 7,000 people in the UK including 6,000 at its Sunderland plant (pictured), has embarked on an urgent cost-cutting drive
Nissan’s worldwide sales slumped by 3.8 per cent to 1.59million vehicles in the first half of the current financial year, largely driven by a 14.3 per cent fall in China
Employees listen to Nissan president and CEO Makoto Uchida speaking at the Nissan plant in Sunderland last year after it was confirmed two new types of EV would be made there
Building work on Nissan’s Sunderland plant started in 1984 and it opened two years later
‘One specific method for this is to change the line speed and shift patterns, thereby increasing the efficiency of operational personnel.’
There have been suggestions that Nissan could strengthen ties with Japan’s second largest car marker Honda, which could buy a stake in the smaller firm – though sources described this as a ‘last resort’.
Toyota is the largest car maker in both Japan and the world, responsible for about 10million vehicles each year – compared to Nissan’s 3.4million.
MailOnline has approached Nissan for comment on the latest reports.
Meanwhile, Nissan also last month called for urgent action to avoid car makers being penalised for the slowdown in electric vehicle sales in the UK which the firm blamed on outdated targets in the country’s Zero Emissions Vehicles Mandate.
The mandate forces firms to increase the proportion of EVs they sell each year until a total ban on new petrol and diesel motors in 2030.
This year, EVs must make up 22 per cent of a firm’s car sales and 10 per cent of van sales, with the threshold rising annually and makers facing a £15,000 fine for every sale beyond it.
Labour’s 2030 target is five years earlier than that set by former Tory prime minister Rishi Sunak.
And Nissan said that missing the target would lead to significant fines for manufacturers unless credits are purchased from EV-only brands – none of which manufacture in the UK.
