The Japanese carmaker admits past disruptions and growing competition from China having cast huge impact on its targets leading to flat sales despite strong profitability.
25 Mar 2024 | 8023 Views | By Autocar Pro News Desk
Nissan Motor Corporation today launched its new business plan - 'The Arc' - to drive value and strengthen competitiveness. The company says the plan is focused on a broad-based product offensive, increased electrification, new approaches to engineering and manufacturing, the adoption of new technologies, and the use of strategic partnerships ...
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Nissan Motor Corporation today launched its new business plan - 'The Arc' - to drive value and strengthen competitiveness. The company says the plan is focused on a broad-based product offensive, increased electrification, new approaches to engineering and manufacturing, the adoption of new technologies, and the use of strategic partnerships to increase global unit sales and improve profitability.
The plan is positioned as a bridge between the Nissan NEXT business transformation plan running from FY2020 through to FY2023 and its long-term vision - Nissan Ambition 2030. The Arc is split into mid-term imperatives for FY2024 through FY2026, and mid-to-long-term actions to be carried out through 2030.
In a global announcement from the Nissan Global Technical Centre in Atsugi, Japan, Nissan Motor Corporation’s President, and Chief Executive Officer Makoto Uchida, in his address, said, “The Arc plan shows our path to the future. It illustrates our continuous progression and ability to navigate changing market conditions.”
“This plan will enable us to go further and faster in driving value and competitiveness. Faced with extreme market volatility, Nissan is taking decisive actions guided by the new plan to ensure sustainable growth and profitability,” he added.
Two-pronged strategy
Under the two-part plan, Nissan Motor Corporation will first take actions to ensure volume growth through a tailored regional strategy and prepare for an accelerated transition to EVs, supported by a balanced electrified / ICE product portfolio, volume growth in major markets and financial discipline.
Through these initiatives Nissan aims to grow annual sales by 1 million units and increase its operating profit margin to more than 6%, both by the end of FY2026. This, the company claims, will pave the way for the second part of the plan aimed to enable the EV transition and realise long-term profitable growth, supported by smart partnerships, enhanced EV competitiveness, differentiated innovations and new revenue streams. By FY2030, Nissan eyes a revenue potential of 2.5 trillion yen from new business opportunities.
Balanced product portfolio
The automaker also plans to launch 30 new models over the next three years, of which 16 will be electrified, and 14 will be ICE models, to meet the diversified customer needs in markets where the pace of electrification differs.
Nissan plans to launch a total of 34 electrified models from fiscal year 2024 and 2030 to cover all segments, with the model mix of electrified vehicles expected to account for 40% globally by FY2026 and rise to 60% by the end of the decade.
To drive cost competitiveness in EVs, Nissan aims to reduce the cost of next-generation EVs by 30% (when compared to the current model Ariya crossover) and achieve cost-parity between EVs and ICE models by FY2030.
In the area of family development alone, the cost of subsequent vehicles – those developed based on the main vehicle in the family – can be reduced by 50%, the variation of trim parts reduced by 70% and development lead time shortened by four months. By adopting modular manufacturing, the vehicle production line will be shortened, reducing the production time per vehicle by 20%, says Uchida
Under the Arc plan, more plants in Japan and overseas will adopt the Nissan Intelligent Factory concept, with the Oppama and Nissan Motor Kyushu plants in Japan, the Sunderland Plant in the UK and Canton and Smyrna plants in the US starting the adoption from FY2026 through 2030. Meanwhile the EV36Zero production approach will be extended from Sunderland in the UK to plants including Canton, Decherd and Smyrna in the U.S., and Tochigi and Kyushu in Japan from FY2025 through 2028.
Strategic partnerships
Nissan will harness strategic partnerships to stay competitive and offer a global portfolio of products and technology. Nissan will continue to leverage the alliance with Renault and Mitsubishi Motors in Europe, LATAM, ASEAN and India.
In China, Nissan will fully utilise its local assets to meet the needs of China and beyond; and explore new partnerships in Japan and the U.S. Batteries will be developed and sourced with partners to bring 135 gigawatt hours of global capacity.
Underpinning the plan is firm financial discipline, enabling stable CAPEX and R&D investment ratio versus net revenue of between 7% to 8% excluding battery capacity investment. Additionally, Nissan plans to invest more than 400 billion yen in battery capacity. Meanwhile, investment in electrification will increase progressively, becoming more than 70% by fiscal year 2026.
Managing these investments is aimed to allow delivering benefits to all stakeholders, with Nissan maintaining positive free cash flow before M&A – even after electrification investments. This is to secure total shareholder return at more than 30%. Nissan aims to maintain net cash at a healthy level of 1 trillion yen throughout the Arc plan period.
New technologies on the anvil
The company’s latest business plan also includes proposals to accelerate the evolution of vehicle intelligence technologies such as next-generation ProPILOT driver-assistance system, which realise door-to-door autonomous driving technology from on-highway to off-highway, private premises, and parking.
Nissan will offer enhanced NCM li-ion, LFP and all solid-state batteries to provide diversified EVs to meet different customer needs. Nissan will significantly enhance NCM li-ion batteries, reducing quick-charging time by 50% and increasing energy density by 50% compared to the Ariya.
LFP batteries, to be developed and produced in Japan, will be launched that will reduce cost by 30% compared to the Sakura EV mini-vehicle. New EVs with enhanced NCM li-ion, LFP and all-solid-state batteries will be launched in fiscal year 2028.