Core Viewpoint - Nissan is undergoing a significant restructuring by closing two domestic factories, aiming to improve operational efficiency and return to growth amidst declining sales and overcapacity [1][2]. Group 1: Factory Closures - Nissan announced the closure of the Zama plant by the end of the 2027 fiscal year, with production shifting to the Kyushu plant in Fukuoka [1]. - The Shonan plant will cease operations by the end of the 2026 fiscal year, marking the first major capacity reduction in Japan since the closure of the Murayama plant in 2001 [1][2]. - Out of five domestic factories, two will be closed while the remaining will continue operations [1]. Group 2: Impact on Workforce and Production - The Zama plant employs approximately 2,400 workers, who will continue working until the end of the 2027 fiscal year [2]. - The current operating rate of Nissan's domestic factories is around 60%, and the closures are expected to increase this rate to 100% and reduce production costs in Japan by 15% [2]. Group 3: Future Plans for Closed Facilities - Discussions are ongoing regarding the future use of the Zama plant, with potential sale negotiations with multiple partners, including Foxconn [2]. - The Zama plant currently produces the "Note" and "Note Aura" models, with plans to transfer the production of the upcoming SUV model "Kicks" to Kyushu [2]. - The Shonan plant is also exploring auxiliary business opportunities, prioritizing employment and considering various possibilities [2].

Investment Rating - The report maintains an "Underperform" rating for Nissan Motor Co Ltd with a price target of ¥250.00 [1][7][39] Core Insights - Nissan's Q1 profits may appear better than guidance, but the path to a turnaround is expected to be challenging due to structural headwinds and the impact of US tariffs [1][10][14] - The company has lowered its operating profit forecast for FY3/26 to JPY -160 billion, reflecting a more conservative perspective on the impact of US tariffs [2][13] - The Re:Nissan recovery plan aims to achieve positive operating profit and free cash flow by FY3/27 through cost reductions and refining market strategies [12][39] Financial Performance - For FY3/25, Nissan reported sales of JPY 12,633 billion, operating profit of JPY 70 billion, and a net profit of JPY -671 billion, with operating profit falling short of guidance by 18% [11] - The forecast for global retail volume in FY3/26 is 3.161 million units, a decrease of 5.5% year-over-year, with a significant impact expected from US import tariffs [2][13] - The company anticipates an operating loss of JPY -200 billion for Q1, attributed to reduced shipment volumes and increased unprofitable fleet sales [3][14] Strategic Initiatives - The Re:Nissan plan includes reducing variable and fixed costs by JPY 250 billion each by FY3/27, consolidating vehicle plants, and reducing the workforce by 20,000 employees by FY3/28 [12][39] - Nissan aims to redefine its market and product strategy, focusing on key markets and models, while reinforcing partnerships with Renault and MMC [12][39] Market Context - Nissan has faced a 40% drop in global sales volume over the past five years due to intensified competition in core markets [17][18] - The company continues to lose market share in the US, China, and ASEAN regions, indicating a structural issue that needs addressing [20][22][24]