Nissan Crisis 2025: Financial Turmoil and Future Prospects

Nissan, once a global automotive leader, is facing an unprecedented financial crisis in 2025. The company’s staggering losses, drastic restructuring, failed merger talks, and management shakeups have put its future in jeopardy. This report offers a comprehensive overview of Nissan’s current challenges, plans to remain afloat, and what lies ahead.

Nissan’s Financial Meltdown: Record Losses and Mounting Debt

Nissan reported a historic net loss of 671 billion yen ($4.5 billion) for the fiscal year ending March 2025, marking its worst financial performance since the crisis of 1999-2000. This loss is driven by:

• Weak sales in key markets like the United States and China.

• Massive impairment charges totaling around 500 billion yen ($3.5 billion) on assets across North America, Europe, Japan, and Latin America.

• A sharp decline in revenue unable to cover the company’s high fixed costs.

• A looming debt wall, with $1.6 billion due in 2025 and $5.6 billion in 2026, is raising fears of a downgrade to junk status.

Nissan has withheld profit forecasts for the upcoming year due to volatile global markets and the threat of U.S. tariffs on imported vehicles, which could further erode profitability. Renault, Nissan’s largest shareholder, expects to take a $2.4 billion hit in Q1 2025 because of Nissan’s struggles.

Massive Cost-Cutting: Jobs, Plants, and Production Slashes

To survive, Nissan is implementing one of the most aggressive restructuring plans in its history:

• Workforce reductions: Nissan plans to cut about 20,000 jobs globally (15% of its workforce) by March 2028, including 11,000 new layoffs announced in May 2025 on top of 9,000 cuts last year. Most layoffs affect manufacturing, but sales, administration, and R&D roles are also impacted.

• Plant closures: Seven of Nissan’s 17 factories worldwide will be shuttered by 2027. The first confirmed closure is in Thailand, while U.S. plants in Smyrna and Canton will reduce shifts instead of full shutdowns. The Decherd engine plant in Tennessee will also downsize.

• Production cuts: Nissan is slashing production of key models like the Rogue SUV by 13,000 units and canceling plans for two new electric sedans. The company also scrapped a $1 billion battery plant project in southern Japan.

• Asset sales: Nissan is considering selling its Yokohama headquarters, valued at nearly $700 million, possibly with a leaseback to maintain operations there.

The goal is to reduce production capacity by 20% (from 5 million to 4 million vehicles annually) and cut costs by approximately $3.4 billion by fiscal 2026.

Funding and Survival Strategies: Raising Capital Amid Crisis

Nissan is aggressively seeking funds to stabilize its finances:

• Plans to raise over ¥1 trillion ($7 billion) via convertible securities, bonds, and loans.

• Pursuit of a £1 billion ($1.4 billion) syndicated loan backed by UK Export Finance.

• Selling assets like the Yokohama headquarters to generate cash.

• Searching for a long-term, stable shareholder to share financial burdens, as the Renault alliance weakens.

A senior Nissan executive warned, “We have 12 or 14 months to survive,” underscoring the urgency.

Failed Partnerships and Merger Talks: The Collapse of the Honda-Nissan Deal

One of the most significant blows to Nissan’s turnaround strategy was the collapse of merger talks with Honda, which would have created the world’s third-largest automaker.

• Background: The merger discussions, revealed in late 2024, aimed to combine Nissan, Honda, and potentially Mitsubishi Motors into a $60 billion entity. This mega-merger was intended to strengthen their position against global competitors, especially in electric vehicles (EVs) and software-driven mobility.

• Key Disagreements: The talks unraveled within a few months due to fundamental disagreements over control and management structure. Honda proposed making Nissan a subsidiary under a share exchange deal, giving Honda majority control over the new entity. Nissan’s leadership, led by then-CEO Makoto Uchida, rejected this outright, insisting on near-equal treatment despite Nissan’s weaker financial position.

• Cultural and Political Factors: Nissan was unwilling to accept deeper workforce cuts and factory closures that Honda demanded, particularly because some closures were politically sensitive in Japan. Nissan’s pride and belief that it could recover independently also contributed to the impasse.

• Decision-Making Speed: Honda expressed concerns over Nissan’s slow decision-making and risk-averse approach, fearing that integration would be sluggish and leave the combined company vulnerable in a fast-changing market.

• Official End: In February 2025, both companies publicly announced the termination of the Memorandum of Understanding (MOU) for the merger. They stated they would continue a strategic partnership focused on intelligence and electrification, but the full merger was off the table.

• Aftermath: The failed merger left Nissan at a crossroads, increasing pressure to restructure independently or seek other partners. Honda remains open to future talks, but only if Nissan’s leadership changes. Meanwhile, Nissan is exploring other collaborations, including potential partnerships with tech companies like Taiwan’s Foxconn.

Impact on Jobs, Plants, and Model Lineup

• Job losses: Approximately 20,000 employees worldwide face layoffs, heavily impacting manufacturing hubs.

• Plant closures: Seven factories will close, affecting local economies and production capacity.

• Model lineup changes: Nissan canceled two new electric sedans and scaled back production of popular models like the Rogue. The iconic GT-R is notably missing from the 2025 lineup, while other models receive only minor updates or special editions.

Management Shakeup: Leadership Under Pressure

Nissan’s management is undergoing significant changes amid the crisis:

• CEO Makoto Uchida resigned in March 2025 amid mounting losses and failed merger talks.

• New CEO Ivan Espinosa has taken charge, focusing on urgent cost-cutting and restructuring. He aims to reduce costs by 500 billion yen (~$3.7 billion) but faces a tough challenge revitalizing Nissan’s brand and operations.

• The board has brought in new independent directors to improve governance, but calls for a deeper leadership overhaul persist.

• Several senior executives have left or been reassigned, and Nissan is reportedly seeking external candidates for key leadership roles to drive turnaround efforts.

What Lies Ahead for Nissan?

Nissan’s future depends on:

• Successfully raising capital and managing debt repayments.

• Executing layoffs and plant closures without destabilizing operations.

• Refocusing product strategy on profitable models and markets.

• Possibly securing new strategic partners or shareholders.

• Overhauling management to restore investor confidence.

• Navigating geopolitical risks like U.S. tariffs and competition from Chinese EV makers.

The company faces a critical 12- to 14-month period that will determine its survival or further decline.

Conclusion

Nissan 2025 crisis is one of the most severe in automotive history, marked by record losses, sweeping layoffs, plant closures, failed mergers, and leadership upheaval. While drastic restructuring and fundraising efforts are underway, the road to recovery is uncertain. Nissan’s ability to adapt quickly and secure strategic support will be key to its survival in a fiercely competitive global market.

References

1. Reuters: Nissan-Honda merger talks collapse over control disputes

2. Al Jazeera: Honda, Nissan end merger talks, scuttling $60bn deal

3. EV Magazine: What the Honda-Nissan merger collapse means for EVs

4. Auto Express: Honda and Nissan merger collapses

5. Invezz: Nissan and Honda abandon $60 billion merger, leaving Nissan at a crossroads

6. GoAuto: Honda-Nissan merger plans scrapped

7. Kyodo News: Honda, Nissan merger talks collapse over management structure