Nissan has cut its annual sales forecast to between 2.97m and 3m cars from a previous projection of 3.15m, citing weakening demand and intensifying competition in China. The manufacturer said it would reduce petrol car production while increasing output of battery electric vehicles and plug-in hybrids to respond to what the company described as an accelerating shift to new energy vehicles.
Ivan Espinosa, Nissan's chief executive, said China remained the company's biggest challenge. 'Demand is weaker, competition is intensifying, and the shift to new energy vehicles is happening faster than expected. The market is being very, very harsh,' he said. Nissan reported that sales across China fell by 22% in the first half of the year, with pressure intensifying from July through October, resulting in a 32% decline in the first nine months of the year.
The company's struggles in China contrast sharply with stronger performance in its home market and North America, where the shift to electric cars has progressed much more slowly due to policy decisions, including the scrapping of battery car incentives in the United States. Nissan said its Chinese product lineup, particularly the Sylphy family of saloon cars, was too heavily oriented toward petrol engines, prompting the company to cut local production, export some models, and accelerate its N series of electric and plug-in hybrid vehicles.
China's government-backed subsidies have created a large number of electric vehicle competitors fighting for a shrinking market. Meanwhile, in Europe, Nissan has pursued a different strategy, lobbying to weaken zero-emission vehicle mandates and allow continued petrol car sales after 2035. This contrasts with evidence of rising electric vehicle demand in the UK, particularly after fuel price increases. Ian Plummer, chief customer officer at Autotrader, noted that used electric vehicle sales rose 56% year on year in October and now account for one in 10 retail sales on the platform.
Nissan's only European factory operates in Sunderland, England. Espinosa expressed hope that the company's products from Sunderland and Japan would qualify for proposed 'Made in Europe' EU rules, though the rules as currently drafted would exclude all Nissan cars from subsidies and other EU incentives. This adds additional pressure on the manufacturer as it navigates divergent electric vehicle adoption rates across global markets.