China Becomes a Base for Nissan’s Competitive Response
Nissan intends to use vehicles developed in China to strengthen its position against Chinese competitors internationally, Chief Executive Ivan Espinosa told CNBC on Wednesday, November 11. The Japanese automaker plans to increase the number of China-developed models it exports from two to five, serving 12 regional market clusters. Espinosa described the expansion as a near-term initiative but did not provide a precise timetable or identify the destination markets in the supplied report.
Speaking on CNBC’s “Squawk Box Europe,” Espinosa said Nissan was developing vehicles specifically for Chinese customers while drawing on local technology, lower costs and quicker development processes. His argument was that Nissan could compete with Chinese manufacturers by adopting the same operational advantages that have helped them expand. The export strategy would extend the use of that China-based development approach beyond the domestic market, making it part of Nissan’s wider competitive response.
Second Forecast Reduction Reflects Pressure on Demand
Nissan lowered its global sales forecast for the fiscal year ending March 2027 to between 2.97 million and 3 million vehicles, compared with its previous estimate of 3.15 million. This followed an August reduction from 3.3 million vehicles to 3.15 million, marking the second downgrade in a matter of months. Despite the lower volume expectations, the company retained its full-year guidance for operating profit and net cash.
The company attributed the additional sales pressure in China to weaker demand, a quicker-than-expected transition toward new energy vehicles and stronger competition. Those conditions have made the world’s largest automotive market particularly difficult for Nissan, even as its restructuring efforts show progress in the United States and Japan. The unchanged financial guidance distinguishes the latest volume downgrade from a broader reduction in its stated annual financial expectations, although it does not remove the competitive challenges behind the sales revision.
Quarterly Earnings Miss Despite Revenue Growth
Nissan also reported second-quarter operating profit of 2.1 billion yen, equivalent to about $13 million, down 96% from a year earlier. That result fell well short of the 54.9 billion yen analysts had expected, according to FactSet figures cited by CNBC. Nissan said the profit decline reflected the absence of a benefit from lower U.S. emissions-related expenses that had supported earnings in the comparable quarter a year earlier.
Net revenue rose 8.2% to 3.1 trillion yen, broadly matching consensus expectations. The results therefore combined higher revenue with a much weaker operating profit outcome. Nissan released the figures after the Tokyo stock market had closed, and CNBC reported that its shares were down 29% for the year to date. The supplied report did not establish a share-price reaction to Wednesday’s earnings announcement.
Cost Cuts Continue as Rivals Rethink China
Espinosa, who became Nissan’s chief executive in April 2025, also highlighted progress on the company’s turnaround. The plan involves reducing its global manufacturing footprint and cutting its workforce by 15%. Around 18 months into the effort, Nissan had achieved 365 billion yen in savings, he said. Those savings represent reported progress on restructuring, while the latest sales forecast shows that market pressures remain substantial.
Nissan’s challenge echoes difficulties elsewhere in the industry. In October, Volvo Cars shares fell sharply after the company reported a swing to an operating loss and cited difficult conditions in China and the United States. Chief Executive Håkan Samuelsson told CNBC that Volvo needed a different approach in China, including regionally adapted vehicles, because the market had changed faster than expected. Nissan’s next stated step is to broaden its China-developed export range, but the precise rollout schedule and its eventual contribution to sales remain unspecified.
Source: CNBC