Automotive News Europe — 2024-03-25
Automotive Industry
Nissan's new midterm business plan aims to lift the automaker's struggling electrified vehicle strategy and reverse years of sliding global sales.
Nissan aims to boost worldwide sales volume by 1 m vehicles, deploy lithium iron phosphate and solid-state batteries and slash the costs of next-generation battery electric vehicles by 30%.
Nissan unveiled the strategy in its new midterm business plan called the Arc. The three-year plan aims to lift the automaker's struggling electrified vehicle strategy and reverse years of sliding global sales.
By using new product development and manufacturing techniques for its next-generation EVs, Nissan is aiming for cost parity between EVs and internal-combustion vehicles by 2030.
Under the plan, the automaker plans to add 135 gigawatt-hours of global battery capacity worldwide. It will also launch 30 new models over the next three years, including 16 electrified vehicles and 14 internal-combustion-powered ones.
Nissan said it will invest more than ¥400 bn ($2.64 bn) in new battery capacity, enough for about 1.35 m EVs by the end of the decade.
The Arc is CEO Makoto Uchida's second midterm plan since taking the helm in December 2019 in the wake of the arrest and ouster of former Chairman Carlos Ghosn. Uchida unveiled his first plan, Nissan Next, in May 2020, targeting global sales growth, meatier profits and big cost savings.
The Arc bridges two timespans, a midterm plan running through 31 March 2027, and longer-term actions extending through 31 March 2031. Some of those long-term goals were already encapsulated in a long-range plan called Ambition 2030 that was unveiled in 2021.
Mixed results
The Nissan Next plan ends on 31 March 2024 with mixed results. The outgoing plan targeted an operating profit margin of 5% and global sales of 5.38 m vehicles. But Nissan's operating margin for this fiscal year is forecast at 4.8%, while its worldwide volume is expected to be 3.7 m units.
The Arc plan aims to lift Nissan's annual global sales by 1 m units by the fiscal year ending 31 March 2027. The goal implies worldwide sales of around 4.7 m in three years' time, which is still below the target set out by Uchida nearly three years ago.
Nissan's global sales have steadily fallen from 5.52 m in the fiscal year that ended March 2019.
"We need to change the way we plan, develop, manufacture and sell cars," Uchida said while unveiling the plan at the company's global tech center south of Tokyo on Monday, 25 March 2024. "We must make radical changes to become a sustainable company," he said. "Disruption is the new normal," he said. "We aim to recover volume and drive profit."
Nissan wants to deliver an operating profit margin of more than 6% in the fiscal year ending 31 March 2027. That would be a one percentage point improvement over Nissan Next’s goals from 2020. Toyota, by contrast, forecasts a double-digit operating profit margin of 11.3% in the current fiscal year ending 31 March 2024.
Among Nissan's goals under the Arc are:
Nissan’s global EV sales peaked at 146,300 vehicles in the calendar year 2022 and retreated to 138,500 in 2023. Production of e-Power hybrid vehicles, by contrast, reached a high of 381,800 in the 2023 calendar year, compared wtih 232,768 in 2022.
A mixed portfolio is part of Nissan's plan. Through the end of the decade, Nissan plans to launch 34 electrified vehicles worldwide in all segments. But by 31 March 2023, electrified vehicles will make up 40% of the global model mix and increase to 60% by 31 March 2031.
In pure EVs, Nissan will overhaul development and production to cut cost and boost margins.
For starters, EVs will be developed in families with integrated powertrains using "next-generation modular manufacturing," group sourcing and battery innovations, Nissan said. This will reduce the cost of next-generation EVs some 30% compared with the current Ariya all-electric crossover that went on sale in 2022 from Japan.
Nissan says it can halve development costs by grouping related EVs. It can get further gains by slashing the variation of trim parts some 70%. Nissan executives think this will be enough to shorten product development lead time by four months.
Production time can be cut by 20%, it estimates, by adopting modular manufacturing.
All combined, these improvements will enable Nissan to save ¥150.00 bn yen ($990.7 m) in EV development costs for the family of five EVs, the company said.
Nissan expects to have capacity to supply up to 300,000 vehicles globally from this new EV family, Chief Planning Officer Ivan Espinosa said.
CEO Uchida said Nissan will do development and production of these new EVs by itself.
Factory upgrades, new battery tech
To ready its global factories for advanced manufacturing, Nissan will deploy the advanced technologies pioneered at its Intelligent Factory in Tochigi, Japan. That factory uses highly automated techniques, including several world-first techniques, for a 10% production cost reduction over older models, despite building more complex vehicles, such as the Ariya.
Nissan's two US factories, as well as its Sunderland plant in the UK and the Oppama and Kyushu assembly plants in Japan, will receive similar upgrades for the production technologies. That will happen from 2026 to 2030.
New battery technology is also in the works. That includes a next-generation nickel manganese cobalt (NMC) lithium-ion battery, lithium iron phosphate (LFP) batteries and solid-state batteries.
Versions of all three technologies will debut in the fiscal year ending 31 March 2023.
The next-generation NMC lithium-ion battery will have a 50% reduction in quick-charging time and a 50% improvement in energy density over the battery used in the Ariya, Nissan says. The LFP batteries, which typically cost less than NMC, will register a 30% cost reduction.
E-Power hybrid for US
To tap into growing US demand for hybrid vehicles, Nissan will launch its e-Power technology there, and also launch plug-in hybrids.
Japanese rivals including Toyota, Honda and Mazda are riding a hybrid wave as US customers looking for electrified vehicles hesitate to commit to full-electric vehicles amid concerns about higher prices, driving range and limited charging infrastructure.
The US market will get a new third-generation e-Power system that arrives by 31 March 2027. The new generation will boost power by 20% over the first generation, while also improving fuel efficiency 10% and reducing cost by 20%.
Nissan will leverage its partnership with Mitsubishi Motors to bring a plug-in hybrid to the US by the fiscal year ending 31 March 2027. It is expected to use the drivetrain featured in the Outlander PHEV.
Nissan will also study joint development of a next-generation one-ton pickup with Mitsubushi. That vehicle would be produced in Mexico, and Nissan will explore all-electric and hybrid options for it.
In the Americas, Nissan wants to increase sales by 330,000 a year. Nissan did not specify a baseline figure. In the current fiscal year ending 31 March 2024, Nissan expects regional sales to increase 29% to 1.32 m in North America, a market encompassing the US, Mexico and Canada. North America is by far Nissan’s biggest and most important market.
Nissan said it will launch seven all-new models in the US and Canada over the next three years, as part of the push. It pledged to refresh 78% of its US lineup in that time.
The company will invest $200 m in “integrated customer experience” in the US, it said.