Over two years, with losses exceeding 1.2 trillion yen, Nissan downsizes to weather the winter.
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On May 13, Nissan Motor officially released its fiscal year 2025 (ending March 31, 2026) performance report.
This annual report sketches the dramatic upheaval a once global giant is undergoing. Nissan's global sales for fiscal 2025 dropped to 3.15 million vehicles, with consolidated revenue at 12 trillion yen, shrinking 4.9% year-on-year. Operating profit slid 16.9% to 58 billion yen, with an operating margin of only 0.5%, barely staying in the positive. Net loss reached 533.1 billion yen. Together with the 670.9 billion yen loss in fiscal 2024, the two-year cumulative net loss exceeds 1.2 trillion yen.
Amid shrinking sales and heavy tariffs, Nissan's profits rely on the reversal of US emission regulation provisions and extreme cost-cutting.
From factory closures to headquarters sales, massive global layoffs, and the breakdown of merger talks with Honda, Nissan is undergoing a painful transformation centered on defensive strategic contraction.
Under the dual pressures of the new energy wave and the strong rise of Chinese automakers, the question of how the once “Technology Nissan” will find a sustainable path between self-sacrifice and survival remains a focus of outside attention.
01 A Divided Financial Report
The peculiarity of Nissan’s fiscal 2025 report is that it presents two entirely different faces of profit at once.
According to Nissan’s consolidated report published on May 13 for the period ending March 31, 2026, the company’s full-year operating profit was 58 billion yen, down 16.9% from the previous year’s 69.8 billion yen, with an operating margin of only 0.5%.
This figure is almost negligible against the scale of 12 trillion yen in revenue. But the result is far better than market expectations: previous analysts generally predicted Nissan would fall into operating loss, and Nissan’s own official guidelines two weeks earlier were even more pessimistic.
President Ivan Espinosa explained at the press conference that the company’s “cost-cutting measures exceeded expectations,” and coupled with the reversal of US emission regulation provisions, operating profit was maintained in the positive.
However, net profit attributable to the parent company owner paints a very different picture. Financial reports show Nissan’s annual net loss reached 533.1 billion yen. Adding the 670.9 billion yen loss in fiscal 2024, Nissan’s cumulative net loss in just two years exceeds 1.2 trillion yen.
The report shows Nissan concentrated non-cash impairment expenses in the fiscal year, involving revaluation of global capacity assets. These book losses don’t directly affect cash flow, but dragged net profit deep into the mire.
This huge gap between operating profit and net profit is not uncommon in finance.
When a company undergoes large-scale restructuring, it often chooses to release impairment of assets, layoff costs, and other nonrecurring losses all in a single fiscal year—a so-called “big bath” operation—to lighten the load in subsequent years. Nissan recorded about 240 billion yen in impairment losses for fiscal 2025, directly reflecting this logic.
However, even the 58 billion yen in operating profit needs to be carefully dissected.
Nissan disclosed in its report that US government tariff policy had a severe impact on full-year operating profit, the specific amount still to be confirmed. The real counterweight, apart from cost reduction, is the reversal of provisions related to US emission regulations. The US relaxed emission restrictions in the relevant sector, allowing Nissan to release provisions made to cope with stringent environmental standards, resulting in a considerable one-time nonrecurring gain included in operating profit.
This means that a sizable portion of the 58 billion yen in operating profit did not come from core business improvements in car sales, but from accounting adjustments brought about by regulatory policy changes.
An automotive industry analyst told Wallstreetcn that such profit improvement “is essentially a regulatory windfall, not an operational turnaround.” After excluding this factor, Nissan’s core business profitability is still questionable. Against a backdrop of global sales falling and revenue shrinking 4.9% year-on-year, the main support for profit is not sales growth, but a combination of cost compression and one-off gains.
Fourth-quarter data also confirms this judgment.
In the quarter, Nissan’s consolidated revenue was 3.4 trillion yen, consolidated operating profit was 68.1 billion yen, and operating margin recovered to 2.0%, outperforming the previous three quarters. But net loss for the same quarter was still 282.9 billion yen, showing the drag of non-cash expenditures lasting all year.
The only noteworthy positive signal was that in the fourth quarter, free cash flow from the automotive business turned positive, recording 112 billion yen, showing initial signs of improvement in cash flow.
Over the full year, Nissan’s global sales of 3.15 million vehicles and revenue of 12 trillion yen were both down from the previous year.
With both revenue and sales declining, profit was virtually entirely dependent on extreme cost-cutting. Espinosa defined fiscal 2025 at the press conference as “a year of restoring profitability.” This wording indirectly confirms that Nissan’s profit was not “earned,” but “saved” and “adjusted.”
For a carmaker striving to return to a growth track, the underlying message of this financial report is much more complex than the surface numbers.
02 A Decade Behind
Nissan’s arrival at today’s situation is not an overnight mutation, but the result of strategic misjudgments and path dependence piling up layer by layer over the past decade.
In FY2017, Nissan’s global sales once reached 5.8 million units, but for FY2025, this has shrunk to 3.15 million units, nearly halved.
The decline is especially glaring in two core markets.
In China, Nissan’s FY2025 sales were about 653,000 units, only 40% of its peak of 1.5 million, with market share dropping to 4.1%. Dongfeng Nissan’s annual sales plunged from a peak of 1.56 million units in 2018 to about 600,000 in 2025—a staggering drop.
The direct reason for this situation is Nissan’s comprehensive lag in electrification and intelligent transformation compared to the Chinese market.
As early as 2010, Nissan’s pure electric model, the Leaf, was once the world’s best-selling EV, but for more than ten years, Nissan lacked competitive new energy products in China.
An industry insider told Wallstreetcn, the main reason for Nissan’s sales decline is “transformation too slow,” product iteration lagging, few new energy products, and strong impact from Chinese brands.
In 2025, the combined market share of the three major Japanese players in China fell below 9%, a sharp reduction from their peak. The premium and technical moat once relied upon by joint-venture brands have been quickly filled.
In the US, Nissan faces similarly tough challenges.
By missing the demand wave for hybrid models, Nissan’s product competitiveness in key segments has continuously declined. Tariff policy shocks compound matters. Although North American sales in FY2025 saw a 2.2% year-on-year increase, this was achieved through “trading price for volume” strategies with deep discounts, eroding margin.
The “short-lived marriage” from the end of 2024 to early 2025 best reflects Nissan’s difficult predicament then.
On December 23, 2024, Honda and Nissan high-profile signed an MOU, planning a holding company jointly funded for a business merger, targeting the world’s third-largest automotive group.
Yet just 52 days later, the highly anticipated merger broke down amid a control dispute. The key difference was Honda’s proposal to turn Nissan into its subsidiary via a share swap, changing the merger structure. Nissan pushed back hard internally, believing this approach would not realize Nissan’s potential and was “unacceptable.”
Honda President Toshihiro Mibe clearly stated, “Nissan turning a profit is an ‘absolute condition’ for the merger,” requiring Nissan to triple operating profit by FY2026—a promise Nissan was unable to fulfill.
Former Renault CEO Carlos Ghosn was even blunter: “A Honda-Nissan merger is a desperate move, not a pragmatic deal.” After the merger dream shattered, Nissan was forced to turn completely to independent survival.
03 Restarting Growth?
Facing the harsh reality of two consecutive years of massive losses, Nissan is undergoing unprecedented structural downsizing.
According to the “Re:Nissan” plan launched in 2025, Nissan will cut about 20,000 jobs worldwide, around 15% of its staff. The number of global vehicle plants will shrink from 17 to 10, with annual capacity compressed from 3.5 million to 2.5 million units. The overall goal is to cut costs by 500 billion yen.
On the R&D side, model platform numbers will be consolidated from 13 to 7, main model development time compressed to 30-37 months. In November 2025, Nissan sold its Yokohama global headquarters building for about 97 billion yen, raising liquidity via a sale-and-leaseback.
Alongside cost reduction, management changes are advancing.
On March 11, 2025, Nissan’s board decided, due to poor performance and the breakdown of talks with Honda, that President and CEO Makoto Uchida would step down at the end of March.
From April 1, Chief Planning Officer Ivan Espinosa took over. He is the second foreign executive to steer Nissan since Ghosn. After taking office, Espinosa quickly launched the “Re:Nissan” plan, establishing cost reduction, focus, and partnerships as three core pillars. At the financial press conference, he called these measures a “fight to the death.”
However, contraction alone is far from enough.
Whether Nissan can find new growth support in the electrification race is the key variable that will decide its future trajectory.
In the “The Arc Nissan Electro Plan” released in March 2024, Nissan set goals to boost global annual sales by 1 million units and raise operating margin above 6% by the end of FY2026.
Judging by the paltry 0.5% operating margin in FY2025, these goals are basically unattainable, but the plans for electrification are still proceeding: launching 30 new models by FY2026, of which 16 will be electrified; cutting next-generation EV costs by 30%, aiming for cost parity between EVs and ICEs by FY2030.
In China, faint positive signals are beginning to appear.
Nissan’s pure EV developed for China achieved a monthly sales peak of 10,148 units in August 2025. In March 2025, Nissan saw year-on-year sales growth in China, partly due to the pull of new models. The company raised its China sales forecast for FY2025/26 from 645,000 to 653,000 units.
Espinosa stated at the press conference that sales in China are growing, “confident in achieving this goal.” Nissan also put forward a long-term goal at the Beijing Auto Show for 1 million sales in China by FY2030.
But these positive signals pale in comparison to Nissan’s challenges.
The N7 achieved a peak monthly sales above 10,000 in August 2025, but then fell off a cliff, with monthly sales under 1,000 in early 2026. Another promising new energy model, the N6, also faces a high-start, low-follow struggle.
Dongfeng Nissan’s new energy transition shortcomings—such as stability in product quality, brand strength, and overlapping product planning—have not fundamentally improved. The latest new energy SUV NX8 uses aggressive pricing to grab market share, but with competitors boosting battery capacity and smart features, its competitiveness is still lacking.
For FY2026, Nissan gave a cautiously optimistic outlook, predicting global sales to increase 4.7% to 3.3 million units, sales revenue up 8.3% to 13 trillion yen, and operating profit soaring to about 200 billion yen.
If achieved, Nissan will return to profitability after two years. But Espinosa admitted that due to geopolitical factors, FY2026’s business environment “will remain very tough.”
Nissan’s current path is a typical defensive contraction logic: cutting capacity, streamlining staff, and compressing costs to buy time and funds for transformation.
In the short term, this is a rational, necessary choice; in the long run, while competitors invest massively in R&D and capacity expansion, over-contraction could cause Nissan to lose further ground in future competition.
Whether Nissan can find genuine “blood generation” after “stop bleeding” depends on whether it can achieve a real breakthrough in product competitiveness in key markets such as China and North America. This fiscal 2025 report is also a footnote to how traditional auto giants struggle to survive amid global industry upheaval.
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