Japanese automakers admit that past turmoil and increased competition from China have had a major impact on their goals, causing sales to remain flat despite high profitability.
Nissan Motor Co., Ltd. today announced “The Arc,” a new business plan to drive value and strengthen competitiveness. The company said its plans include a broad product offensive, a push toward electrification, new approaches to engineering and manufacturing, the adoption of new technologies, and strategic partnerships to increase global sales and improve profitability. The focus is on utilization.
This plan is positioned as a bridge between Nissan NEXT, our business transformation plan from fiscal 2020 to fiscal 2023, and our long-term vision, Nissan Ambition 2030. Ark is divided into medium-term projects from 2024 to 2026, and long-term projects from mid-term to 2026. A long-term initiative that will run until 2030.
During the worldwide announcement from the Nissan Global Technical Center in Atsugi, Japan, Makoto Uchida, President and Chief Executive Officer of Nissan Motor Co., Ltd., said in his remarks: This demonstrates our continued progress and ability to successfully navigate changing market conditions. ”
“This plan will enable us to drive value and competitiveness even faster. Facing extreme market volatility, Nissan is implementing new plans to ensure sustainable growth and profitability. We are taking decisive action based on this,” he added.
Two-pronged strategy
Under the two-part plan, Nissan will first take steps to ensure sales growth through regionally tailored strategies, a balanced electric/ICE product portfolio, sales growth in key markets, and financial Prepare for an accelerated transition to EVs supported by discipline. .
Through these efforts, Nissan aims to increase annual sales to 1 million vehicles and increase operating profit margin to more than 6% by the end of fiscal 2026. This aims to enable the transition to EVs and enable long-term profitable growth supported by smart partnerships, enhanced EV competitiveness, differentiated innovation and new revenue streams. This paves the way for the second part of the plan, the company claims. Nissan expects to generate 2.5 trillion yen in revenue by fiscal 2030 from new business opportunities.
Balanced product portfolio
In addition, in order to meet the diversifying needs of customers in markets where the pace of electrification is different, the company plans to introduce 30 new models over the next three years, of which 16 will be electrified models and 14 will be ICE models.
Nissan plans to release a total of 34 electrified models covering all segments from 2024 to 2030, with the electrified model mix expected to account for 40% of the world's total by 2026 and reach 60% by the end of 2010. It is expected to increase to %.
In order to increase the cost competitiveness of EVs, Nissan aims to reduce the cost of next-generation EVs by 30% by 2030 (compared to the current Ariya crossover) and equalize the costs of EV and ICE models.
In the area of family development alone, costs for follow-on vehicles developed based on the family's flagship vehicle will be reduced by 50%, trim part variations will be reduced by 70%, and development lead times will be reduced by four months. Uchida says that by adopting modular production, the vehicle production line can be shortened and the production time per vehicle can be reduced by 20%.
Under the Arc Plan, the Nissan Intelligent Factory concept will be introduced at plants in Japan and overseas, starting in 2026 at the Oppama Plant in Japan and the Nissan Motor Kyushu Plant, the Sunderland Plant in the United Kingdom, and the Canton and Smyrna Plants in the United States. Meanwhile, the EV36Zero production approach is scheduled to expand from FY2025 to FY2028 from Sunderland in the UK to plants including Canton, Dechard and Smyrna in the US, and Tochigi and Kyushu in Japan.
strategic partnership
Nissan will leverage strategic partnerships to maintain its competitive edge and offer a world-class portfolio of products and technologies. Nissan will continue to leverage its alliances with Renault and Mitsubishi Motors in Europe, Latin America, ASEAN and India.
In China, Nissan will make maximum use of local assets to meet the needs of China and other regions. The batteries will be developed and sourced with partners and will deliver 135 gigawatt-hours of capacity globally.
Underpinning this plan is strong financial discipline, allowing for a stable capital and R&D investment ratio of 7% to 8% of net revenue, excluding investments in battery capacity. Additionally, Nissan plans to invest more than 400 billion yen in battery capacity. Meanwhile, investment in electrification will gradually increase, reaching over 70% in FY2026.
The management of these investments is aimed at benefiting all stakeholders, with Nissan maintaining positive free cash flow both before the M&A and after the electrification investment. This is to ensure a total shareholder return of 30% or more. Nissan aims to maintain net cash at a healthy level of 1 trillion yen throughout the period of the Ark plan.
New technology for anvil
The company's latest business plan also includes proposals to accelerate the evolution of vehicle intelligence technology, such as ProPILOT, a next-generation driver assistance system that will enable door-to-door autonomous driving technology from on-highway to off-highway to private property. . parking.
Nissan will offer enhanced NCM lithium-ion batteries, LFP batteries, and solid-state batteries to offer a variety of EVs that meet the needs of various customers. Nissan has significantly enhanced the NCM lithium-ion battery, reducing fast charging time by 50% and increasing energy density by 50% compared to the Ariya.
The company will develop, produce and sell LFP batteries in Japan, which can reduce costs by 30% compared to the light vehicle “Sakura EV.” A new EV equipped with enhanced NCM lithium-ion batteries, LFP batteries, and all-solid-state batteries is scheduled to be released in 2028.
