NISSAN, currently undergoing a cost-cutting program to restore profitability, has reported a Y221.9b ($A2.2b) net loss for the first half of its FY25 year and has announced plans to sell its Yokohama headquarters building.

The result compares with its net profit of Y19.2b ($A190m) in the previous corresponding period. It also reported first-half sales revenue fell 6.8 per cent to Y5.5t ($A54.6b).

The company has embarked on a restructuring plan that includes a roughly 15 per cent reduction in headcount, a cut in global output of about 30 per cent to 2.5 million vehicles, and a consolidation of manufacturing sites from 17 to 10.

Nissan president and CEO Ivan Espinosa

Nissan said the half-year loss was attributed to weak performance in its core automotive operations and the effect of additional US tariffs on Japanese goods introduced by the Trump administration.

Nissan president and CEO Ivan Espinosa, who was appointed in April, said: “Our first-half results reflect the challenges we face, yet they confirm that Nissan is firmly on the path to recovery. 

“The second half will bring its own hurdles, but with focus, discipline, and the actions underway, I am confident we will deliver stronger results.”

For the full fiscal year ending March 2026, the company now projects revenue of Y11.7t ($A116.3b), a 6.4 per cent reduction from its previous outlook of Y12.5t ($A124.2b).

It expects to break even at the operating level when excluding the impact of US tariffs; including estimated tariffs, Nissan forecasts an operating loss of Y275b ($A2.73b).

Nissan said its cost-saving measures are progressing, targeting cumulative savings of Y500b ($A4.97b) by FY26.

The plan targets the Y500b ($A4.97b) in savings as Nissan addresses declining sales, particularly in China and the US, following an expansion strategy that did not deliver expected results.

The Yokohama headquarters sale forms part of the company’s strategy to dispose of non-core assets. Under the deal, Nissan will lease the building back for 20 years, allowing it to continue operating there as its head office.

The company said that proceeds will be reinvested to modernise facilities and support future growth under the Re:Nissan programme.

Automotive News said that Nissan is facing its worst financial crisis in more than two decades, when it was rescued from near bankruptcy by French carmaker Renault under the direction of Carlos Ghosn. 

It said that the car-maker has faced “cratering profits and a mountain of debt, after a revolving-door leadership and weak product lineup were compounded by weak sales in the US and China.”

Nissan CFO Jeremie Papin said: “While our first-half results reflect temporary benefits and payback from cost-saving initiatives, we anticipate ongoing challenging competitive environments in the second half, supply chain risks and the seasonality of business.

“Our priority remains disciplined execution, strong cash flow management, and safeguarding profitability as we navigate these headwinds. We are committed to maintaining transparency and delivering on the objectives of Re:Nissan.”

CEO Ivan Espinosa has set out a restructuring plan that includes a roughly 15 per cent reduction in headcount, a cut in global output of about 30 per cent to 2.5 million vehicles, and a consolidation of manufacturing sites from 17 to 10.

Aside from financial issues, Nissan is under pressure from its US dealer network on compensation, particularly its ‘stair-step’ sales bonuses.

Nissan in June stopped tying dealer compensation to about 20 performance-based metrics, instead basing payouts solely on new-vehicle sales. 

It made the change to get the retail network focused on growing share in its biggest market.

Automotive News said that at the time, Nissan executives vowed that dealership sales objectives would be “much more reasonable” than ‘stair step’ bonuses.

A dealer group now says the sales targets set by Nissan are too high and that many of the sales incentives to dealers have ceased.

Retail incentives in the US include the ‘quality growth program’ and ‘retail development fund’ that reward retailers for achieving high customer satisfaction scores and signing buyers up for factory financing and connected-car services.

Nissan US sales and marketing chief Michael Soutter dismissed the criticism that the company’s volume expectations are unrealistic, saying they mirror the brand’s retail share.

“We’re selling at 5.1 per cent, and we’re setting the targets at 5.1 per cent,” Mr Soutter told Automotive News.

“Anytime there’s an objective, you’re going to have some people that are not happy,” he said. 

“I don’t want to minimize the frustration that some dealers face. I would like to see all the dealers stretching themselves and getting a 5 per cent share or better.”

Stair-steps are a familiar source of friction between Nissan and its retailers. Former chairman Carlos Ghosn relied on the practice for a decade to grow US market share.

Retailers interviewed by Automotive News said aggressive sales targets during the Ghosn era “fostered a culture of price discounting, diminished resale values and damaged dealership balance sheets.”

The Nissan National Dealer Advisory Board chairman Mike Rezi said Nissan’s new administration in Japan and the US was making “steady progress to restore Nissan to its rightful place among Tier One automotive companies. This turnaround will take time, but we are on the right track.”