Nissan Motor cut its global sales forecast for the fiscal year ending March 2027 to between 2.97 million and 3 million vehicles, down from 3.15 million previously, as competition in China forces the company to rethink its strategy. The company said in a statement that in China, weaker demand, a faster-than-anticipated shift to new energy vehicles and intensifying competition are putting greater pressure on sales than initially anticipated. This marks the second downward revision in months, following an August cut from 3.3 million units to 3.15 million units.
In response to the Chinese market challenges, CEO Ivan Espinosa told CNBC on Wednesday that Nissan plans to expand exports of vehicles developed in China to compete against Chinese rivals globally. The company will rapidly increase exports of China-developed vehicles from two models to five, targeting 12 regional market clusters in the near term. Espinosa said Nissan is developing vehicles specifically for Chinese consumers using local technology, lower costs and faster development processes. He told CNBC's Squawk Box Europe that the company can defend itself against aggressive competitors by using the same elements: speed, cost and good technology.
Nissan's latest quarterly results underscored the pressure facing the Japanese automaker. The company reported a 96 percent drop in second-quarter operating profit to 2.1 billion yen, significantly below analyst expectations of 54.9 billion yen according to FactSet. The company said the drop was due to no longer having the benefit of lower U.S. emissions-related expenses that boosted profits a year ago. Net revenue grew 8.2 percent to 3.1 trillion yen in the quarter, largely in line with consensus. Nissan maintained its full-year operating profit and net cash guidance despite the sales forecast cut.
The challenges facing Nissan reflect wider pressures on Western automakers in China. In October, Volvo Cars shares crashed after the company reported a swing to operating loss, citing tough market conditions in China and the U.S. CEO Håkan Samuelsson told CNBC that selling global cars developed in Europe and China will not work, and this is affecting all Western players in the market. Nissan shares are down 29 percent year-to-date, and Frankfurt-listed shares dropped 4 percent in early afternoon trading following the announcement.
Espinosa, who has led Nissan since April 2025, emphasized progress on a turnaround plan to reduce the company's global manufacturing footprint and cut its workforce by 15 percent. About 18 months into the plan, the company has achieved 365 billion yen in savings. Despite these restructuring efforts showing progress in the U.S. and Japan, Nissan faces weakening demand and an accelerating shift toward electric vehicles in China, the world's largest auto market.