JINGGUANTAICN ORIGINAL
Text | Hui Pengquan
Under the impact of China's independent car companies, another Japanese car brand has embarked on the road of factory closure.
According to the Nihon Keizai Shimbun, Nissan Motor's global headquarters recently announced that its plant in Changzhou, Jiangsu Province, had been closed on June 21.
This is also the first time that Nissan has closed a vehicle plant in China.
Although Dongfeng Nissan refuted the rumors of the closure of the factory, saying that it was "only suspending production", this behavior has not only attracted widespread attention in the automotive industry, but is also seen as a clear signal of Nissan's strategic adjustment in the Chinese market.
Source/Sina Technology's official Weibo Screenshot of Jingguantai
Looking back, Nissan's annual sales in the Chinese market reached a peak of 1.563 million units in 2018, and Nissan was undoubtedly a bright star in the Chinese market at that time.
However, with the intensification of market competition, especially the rapid development of Chinese independent automakers in the field of new energy vehicles, Nissan's sales have begun to decline. By 2024, Nissan's cumulative sales in China will decline by 1.01% year-on-year, and Dongfeng Nissan will fall out of the TOP10 of the manufacturer's sales list released by the Passenger Association, which will undoubtedly bring huge pressure to Nissan.
Faced with the continuous decline in sales, Nissan had to re-examine its strategic layout in the Chinese market.
However, in a Chinese market where the penetration rate of new energy vehicles has reached 50%, the introduction of new products and the adjustment of market strategies require more innovation and wisdom.
For Nissan, as well as all car companies, it has become a luxury to quickly occupy the market with just one or two products.
Nissan's sales woes
Nissan, the auto giant that was once known as the "Japanese Three Heroes" along with Toyota and Honda, has not escaped the fate of closing the factory.
According to the data, since 2018, it took more than 700 days and a total investment of nearly 1.4 billion yuan to finally complete the construction of the Changzhou factory. As Nissan's newest plant in China, the Changzhou plant is a production base for Nissan's passenger cars, even though it has been in operation for less than four years.
A spokesperson for Nissan said the closure of the Changzhou plant was part of a strategic adjustment to address market challenges as part of the effort to optimize production. The "market challenges" mentioned by the above-mentioned speakers may be the rapid decline in Nissan's sales in China under the fierce "involution" of the domestic auto market.
According to public information, the Changzhou plant mainly produces Dongfeng Nissan Qashqai. According to the latest data, in May 2024, Qashqai sold 11,037 units, accounting for 19.71% of Dongfeng Nissan's sales; From January to May 2024, although the cumulative sales of Qashqai reached 45,523 units, it decreased by 59.91% year-on-year.
Retail data shows that Qashqai sold 150,600 units in 2022, and in 2023, this figure will slide to 113,600 units.
But it's not just the Qashqai that's declining in sales. It is understood that Nissan mainly operates three major brands in the Chinese market: Nissan, Infiniti and Venucia. Among them, the Nissan brand is the main source of sales for Nissan China, and the models responsible for sales include Sylphy, Teana, X-Trail, Qashqai, Loulan, etc.
Source/Dongfeng Nissan official website Screenshot of the Mirror View Platform
Among the above-mentioned models, except for the Qashqai, which directly led to the closure of the factory due to the decline in sales, even Nissan's best-selling Sylphy, its sales from January to May 2024 will only be 135,800, with a year-on-year growth rate of only 0.7%.
In addition, the latest data shows that in May 2024, the sales of other Nissan models that consumers are familiar with will only be 5,560 units of the Teana, 2,888 units of the X-Trail, and 1,736 units of the Tiida, while the sales of Jinke and Arrow will not be more than 100 units.
The sharp drop in sales of major models also directly affected brand sales.
According to official data, from January to May 2024, Nissan's cumulative sales in China will be 286,400 units, a year-on-year decrease of 1.01%; Dongfeng Nissan has repeatedly fallen out of the TOP10 list of manufacturers' sales released by the Passenger Association.
Factory closures, and with it, layoffs.
According to the "Jinan Report", some insiders broke the news that after the factory was closed, most of the layoffs would give at least N+1 compensation, but a small number of high-level executives went to other bases or resigned and left directly. However, at present, Nissan Motor and Dongfeng Nissan officials have not responded to the above news.
However, according to internal sources cited by Deep Technology, it is expected that the compensation plan will not be less than "N+3", and some employees even expect to reach "N+6" or "N+7". The specific compensation plan is expected to be announced in the near future.
Nissan's "crisis" has long been foreshadowed
Although Nissan's Changzhou plant was recently closed, Nissan's sales woes in the Chinese market have long been a reality.
In fact, Nissan's sales in the Chinese market began to decline since 2018, but it was not until 2022 that the rate of decline began to increase significantly.
According to Nissan's official data, Nissan's annual sales in the Chinese market in 2020 were 1.456 million units, which seemed quite impressive at the time. However, the good times did not last long, and by 2022, Nissan's sales had fallen sharply to 1.045 million units, a year-on-year decrease of 22.1%, a significant decline.
According to the data released by Nissan China, Nissan's annual sales in 2023 will further decline to 793,000 units, a year-on-year decline of 24.8%, which undoubtedly puts huge pressure on Nissan.
Source: Nissan official
Source/Mirror Observatory Cartography
The Chinese market is one of Nissan's core markets in the world, and the sharp decline in sales has directly affected Nissan's overall performance. Faced with this dire situation, Nissan had to reassess its expectations in the Chinese market and adjust accordingly.
On April 19, 2024, Nissan Motor announced that it has decided to lower its operating profit forecast for the current year by 14.5% due to the impact of lower than expected vehicle sales and the impact of multiple factors such as inflation. This is a clear signal that Nissan is responding positively to market changes and striving to maintain a strong financial position in an uncertain environment.
The adjusted forecast shows that Nissan's net profit in fiscal 2024 will reach 370.00 billion yen (about 17.3 billion yuan), the full-year operating profit is expected to be 530.00 billion yen (about 24.8 billion yuan), and the annual net sales are expected to be 12.60 trillion yen (about 590.7 billion yuan).
According to industry insiders, these adjustments are not only a direct response to the current market conditions, but also part of Nissan's strategic restructuring and resource optimization on a global scale. "Nissan needs to explore new growth streams and market opportunities while remaining cost-effective in order to remain competitive in the highly competitive automotive market."
However, in stark contrast to the current situation of Nissan, in 2018, Nissan's brilliant achievements in the Chinese market were remarkable.
That year, Dongfeng Motor, Nissan's parent company, achieved sales of 1.563 million vehicles through its Dongfeng Nissan, Venucia and Infiniti brands, which not only set a new historical record, but also became the peak moment of Nissan in the Chinese market.
But the global automotive industry changed dramatically in the five years that followed. Especially under the leadership of Chinese car companies, the rapid development of new energy vehicles has exceeded all expectations.
This change has undoubtedly brought unprecedented challenges to traditional car manufacturers.
This is despite the fact that Dongfeng Motor announced the ambitious "Dongfeng Co., Ltd. Green 2022 Plan" at the company's 15th anniversary celebration on August 8, 2018, and plans to introduce a total of 20 electric drive models by 2022, increasing sales by 1 million units to 2.6 million units.
But at least judging from the current situation, Dongfeng Motor does not seem to have kept up with the pace of the market when it is really facing transformation.
Nissan may not be able to return to the top
This can also be seen in the remarks of Nissan executives.
Mr. Shohei Yamazaki, Chairman of the Management Committee of Nissan China and President of Dongfeng Motor Co., Ltd., said, "In the first five months of this year, the situation in the Chinese market was still complicated, and the penetration rate of China's new energy vehicle market exceeded 50%. ”
He emphasized that in order to better adapt to the rapid changes in the market and consumer demand, Nissan has accelerated the transformation of intelligent and electric drive in the Chinese market.
Mr. Shohei Yamazaki further pointed out, "In the future, Nissan Motor will meet the diverse needs of its customers with a more balanced lineup. ”
For Nissan, in order to truly meet the needs of users, it is undoubtedly to increase the layout in the field of pure electric and hybrid power.
On June 24, Dongfeng Nissan, a joint venture of Nissan Motor in China, mentioned to the media that the company will invest more than 10 billion yuan to increase the production line layout and research and development of new energy vehicles on the premise of ensuring the production capacity of existing fuel models, so as to better meet the needs of users.
In fact, Nissan has been increasing production line layout and investment in new energy vehicles. On June 16, Dongfeng Nissan released the "New Struggle 100" action plan for the next three years.
According to the action plan, by the end of 2026, Dongfeng Nissan will launch seven new energy products, and also expand its export business, with an initial export target of 100,000 units. To this end, in the next three years, Dongfeng Nissan will invest more than 10 billion yuan in research and development. The number of R&D personnel will also be increased from the existing 1,600 to about 4,000.
In addition, at the "2024 Beijing International Automobile Exhibition", Nissan not only launched five new energy concept models equipped with pure electric and plug-in hybrid technologies developed based on the needs of Chinese users, but also made its debut in China at the Beijing Auto Show.
Source/Mirror Observatory Photography
Makoto Uchida, president and CEO of Nissan Motor Co., said that the Chinese market is changing dramatically. Nissan needed to respond quickly and remain competitive. "As a result, Nissan has developed a balanced and focused strategy tailored specifically for the Chinese market under its new strategic plan, 'The Arc'."
However, transformation doesn't happen overnight.
Especially in the context of the increasingly fierce competition in China's new energy vehicle market, it is difficult for Nissan to quickly occupy the market with a single product or a few products.
In this regard, some industry insiders said that the market's requirements for Nissan or other car companies are no longer just the product itself, but also include brand influence, technological innovation capabilities, market response speed and customer service throughout the life cycle.
"What's more, to date, Nissan has not launched competitive new energy products."
As mentioned above, in this context, if Nissan wants to "survive" well in China, it needs to have a deeper understanding of the characteristics of the Chinese market and the needs of consumers, accelerate the pace of intelligent and electric transformation, and strengthen cooperation with local enterprises to enhance the competitiveness of products.
However, even if Nissan can find new growth points in the new energy vehicle market, it may be difficult to create the glory of the era of fuel vehicles.
*The title picture comes from the official website of Dongfeng Nissan, and the screenshot of the mirror viewing platform.
*Disclaimer: Under no circumstances does the information or opinions expressed in this article constitute investment advice to any person.