Analysis-Nissan is rolling out big cuts. Turning around sales will prove harder

By Daniel Leussink

TOKYO (Reuters) -Nissan's caller main enforcement Ivan Espinosa faces an uphill task turning astir the troubled Japanese automaker with nary warrant it tin reverse sliding top-line sales, analysts said, adjacent arsenic helium moves to slash costs.

With a deficiency of caller models, caller tariffs successful its biggest market, and crisp contention from section and Chinese rivals, Nissan volition beryllium hard-pressed to enactment up sales, which person plunged 42% since the 2017 concern year.

Espinosa unveiled plans connected Tuesday to chopped 11,000 much jobs and unopen 7 plants and flagged that income measurement was expected to driblet 3% successful the existent fiscal year, arsenic show successful its cardinal markets continues to travel nether pressure.

It expected income successful China to plunge 18%, portion income successful North America and Japan are projected to enactment astir flat.

"They don't person a hybrid lineup. Their BEVs are not peculiarly successful," said Julie Boote, an expert astatine probe steadfast Pelham Smithers Associates, referring to battery-powered electrical vehicles and Nissan's offerings successful the U.S.

"They volition person to enactment connected caller exemplary launches, but that takes time, and there's nary warrant that they volition beryllium much palmy than before."

Espinosa has promised to dramatically shorten conveyance improvement times and centre its strategy successful the U.S., its astir important market, astir crossovers and athletics inferior vehicles.

"We recognize that a sustainable betterment cannot trust solely connected outgo reductions. It indispensable besides beryllium supported by beardown merchandise offerings," helium said.

As portion of the strategy, Nissan volition commencement offering a plug-in hybrid mentation of the Rogue SUV, its top-selling U.S. vehicle, successful North America this fiscal twelvemonth by jointly processing it with its spouse Mitsubishi Motors.

Another hybrid mentation of the conveyance volition beryllium launched successful the adjacent fiscal twelvemonth and volition beryllium equipped with Nissan's e-Power hybrid technology.

Boote said she was not convinced of the strategy's success, cautioning plug-in hybrids bash not make the aforesaid level of request arsenic axenic hybrid models.

"They volition request to present charismatic products to execute this goal," said Masahiro Akita, a elder expert astatine Bernstein, referring to expanding its apical enactment growth.

TARIFF AND MARGIN CHALLENGES

New U.S. tariffs connected imported cars and car parts complicate Nissan's program to support its income diminution astatine conscionable 3% to 3.25 cardinal vehicles successful the existent concern twelvemonth and its request to crook astir shrinking margins.

Not lone bash the tariffs mean it whitethorn person to hike selling prices successful the U.S., but they besides rise input costs for its manufacturing plants there.