Nissan Plans $2.8B in Cost Cuts, Will Phase Out Datsun Brand, Report Says
Nissan is planning to cut about 300 billion yen ($2.8 billion) in annual fixed costs and book restructuring charges as the coronavirus pandemic further depresses the automaker’s sales, a person with knowledge of the measures said. Automotive News reports that those initiatives are likely part of a three-year plan that will be unveiled along with financial results on May 28, calling for Nissan to take more drastic measures to turn the manufacturer around, said the person, asking not to be identified because the information is not public. The automaker will phase out the Datsun brand, shut down one production line in addition to the recently closed operation in Indonesia and reach the reduced spending target this year by cutting marketing, research and other costs, the person said. The plans still need to be reviewed by Nissan’s board and may change, people familiar with the deliberations around the restructuring plan said. The scale of the restructuring charge is still being determined as well, they said. Read more here.
The Pandemic Will Permanently Change the Auto Industry
The auto industry was bracing for a brutal year even before the coronavirus idled factories, closed dealerships and sent sales into a free fall. Now, according to The New York Times, things are about to get really Darwinian: The industry is expected to realign in ways that could have a profound effect on the eight million people worldwide who work for vehicle manufacturers. It took almost a decade for car sales in the European Union to recover from the recession that began in 2008. The United States market took about five years to bounce back, but sales have been flat since 2015. As Volkswagen, Daimler, Fiat Chrysler and other companies slowly restart their assembly lines, people who work in the car business are beginning to ponder what the repercussions of this crisis will be. Click here for a look at what to expect.
Toyota Sees Recovery This Year
Toyota Motor Corp. said it believed the worst of the economic impact from the coronavirus pandemic was over and auto sales could recover by the end of the year in its biggest markets, reports The Wall Street Journal. “The lockdown regulations are being lifted in the U.S., and production is resuming,” said Kenta Kon, Toyota’s chief financial officer. In the U.S. and Europe, the combination of a recovering economy and government stimulus means car sales could rebound to 2019 levels by the end of the year, he said. Toyota’s prognosis was among the sunniest offered by auto makers after months of a virus-induced economic shutdown. Others have hesitated to pinpoint a turnaround schedule. Volkswagen AG Chief Financial Officer Frank Witter said April 29 that “no one has a clear visibility on the duration and severity of this crisis.” Most car makers are hoarding cash and slashing spending to ensure they can survive a prolonged downturn. Toyota said it had a ¥8 trillion ($74.4 billion) cash stockpile, the product of a decade-long cost-cutting effort. Read more here.
'We Are Starting to Move Around': Drivers Are Hitting the Road More Often, Data Shows
Americans are slowly getting back on the road after hunkering down due to the coronavirus, though the volume of traffic is still well below what it was before many states issued stay-at-home orders, reports USA Today. Drivers in the U.S. have been more active in the past week than at any time since mid-March, according to an AP analysis of StreetLight Data Inc., an analytics software company that aggregates data from smartphones and other GPS-enabled devices and combines it with information from maps and other sources to provide county-level data on vehicle miles traveled. The most recent data shows that activity during the seven-day period ending May 8 was 60% higher than the lowest point since the COVID-19 crisis began. However, activity still was down 49% compared to January 2020 and well below what would be expected in the spring under normal circumstances. Read more here.
GM Predicts It Will Be Back to Full Production in About 4 Weeks
The Detroit Free Press reports that the automaker brutalized by a 40-day UAW strike plans to take its sharpened rapid response skills and go from total shutdown to total production by mid-June, a top General Motors official acknowledged this week. "Not every facility will ramp up as fast as possible ... Ideally, in a perfect world, by around June 15, all of our facilities would be operating at their original capacity. But, again, I just give the caveat: market demand. We're not going to override market demand,” said Philip Kienle, GM vice president of North American manufacturing, in response to a direct question during a call with reporters on Monday. CEO Mary Barra voiced confidence on Tuesday in her company's ability to rebound and accommodate unforeseen challenges. She shared her views during a webinar with Massachusetts Institute of Technology President L. Rafael Reif. Read more here.
Around the Web
The 10 Cars That Made Audi Great in America [Autoblog]
Tesla May Get to Reopen Calif. Plant Next Week [Automotive News]
The Era of the SUV Coupe Has Begun [Bloomberg]
Recommendations for the New College Grad Needing a Car [The Detroit Bureau]
