Core Viewpoint - Nissan is facing significant operational challenges, leading to a large-scale layoff of 20,000 employees, approximately 15% of its workforce, primarily due to a drastic decline in sales in the Chinese market, which fell by 12.2% in fiscal year 2024, totaling around 690,000 units sold [1][3][5]. Group 1: Sales Performance - Nissan's sales in China have been declining for six consecutive years, with a notable drop from approximately 1.38 million units in 2021 to 1.045 million in 2022 (down 22.1%), further decreasing to 793,000 in 2023 (down 24.2%), and reaching only 696,000 in 2024 (down 12.2%) [3][4][5]. - The company's market share in China has decreased from around 6% a few years ago to less than 4% in 2023, while the overall passenger vehicle market grew by 5.6% to 21.7 million units [6][3]. Group 2: Internal Challenges - The decline in Nissan's performance is attributed to slow decision-making and strategic missteps by the management team following Carlos Ghosn's departure, leading to a lack of innovation and product development [2][9][10]. - Nissan's product lineup is heavily reliant on an aging model, the Sylphy sedan, with over 99% of its sales still coming from traditional fuel vehicles, indicating a significant delay in the transition to electric vehicles [6][10][11]. - The company has faced internal turmoil, including management instability and governance issues, which have hindered its ability to respond effectively to market changes [12][13]. Group 3: Market Environment - The Chinese automotive market is undergoing a significant shift towards electrification, with local brands capturing over 90% of the new energy vehicle market share, while Nissan's presence in this segment remains minimal [14][15]. - In 2023, the sales of new energy vehicles in China reached 7.748 million units, growing by 36.5%, while Nissan's electric vehicle offerings have been limited, resulting in negligible sales impact [14][15]. - The competitive landscape has intensified, with local brands like BYD achieving substantial sales growth, further pressuring Nissan's market position [15][16]. Group 4: Future Strategies - Nissan is at a crossroads, facing potential outcomes of gradual exit, decisive transformation, or a struggle for resurgence in the Chinese market [18][19]. - The company has announced plans to invest 10 billion RMB in China and aims to launch 10 new models by 2027, indicating a commitment to revitalizing its product offerings [20][21]. - To regain market share, Nissan may need to adopt aggressive pricing and service strategies, balancing short-term profitability with long-term brand recovery [22][21].

Core Insights - Nissan is undergoing a significant strategic contraction in the Chinese market, with plans to fully shut down its Wuhan manufacturing plant by FY2025, marking it as the shortest-lived facility in Nissan's global production network [1] - The company's electric vehicle (EV) strategy in China has failed, with its flagship electric SUV, Ariya, and its fuel vehicle, X-Trail, both struggling to achieve production volumes, resulting in a capacity utilization rate of less than 10% [1] Sales Decline - Nissan's sales in China fell to 697,000 units in 2024, a 12.2% year-on-year decline, and down from a peak of 1.564 million units in 2018, leading to a market share drop from 7.8% to 4.1% [2] - In Q1 2025, sales further plummeted by 27.47% to 121,000 units, with EVs accounting for less than 15% of total sales, contrasting sharply with local brands that hold a 65% market share [2] Strategic Missteps - Nissan's hesitance in strategic direction has been detrimental, as it has only launched two pure electric models in China by 2025, lagging behind local brands that introduce an average of 10 new models annually [3] - The company's e-POWER hybrid technology has been excluded from green license plate policies due to its incompatibility with China's charging infrastructure, leading to a significant drop in sales [3] Product and Market Imbalance - Nissan's product lineup is heavily skewed towards the 100,000 to 150,000 yuan price range, lacking high-end offerings, which has resulted in a loss of market share to competitors like BYD [3] - The X-Trail's sales dropped dramatically after the introduction of a three-cylinder engine, and the Sylphy's average selling price has decreased significantly, indicating a loss of brand premium [3] Production Capacity Issues - Nissan's production capacity in China reached 1.6 million units by 2023, but the actual utilization rate was only 42.1%, with the Wuhan plant producing just 11,200 units in 2023 [5] Industry Trends - Japanese automakers are collectively facing challenges in the Chinese market, with their market share dropping from 18% in 2020 to 10.3% in 2024, while domestic brands have surged to 69.9% [6] - Honda's sales fell by 30.9% in 2024, while Toyota's sales also declined, prompting layoffs and factory closures among Japanese automakers [6] Technological Challenges - The traditional model of "global vehicles with local adaptations" has failed in the era of smart vehicles, as Japanese brands struggle to keep up with rapid technological advancements and consumer demands for smart features [7] - Japanese automakers are attempting to adapt by forming partnerships and investing in new technologies, but these efforts may not be sufficient to reverse their declining fortunes [8]