Nissan Motor has launched The Arc, its new business plan to drive value and strengthen competitiveness. The plan will focus on a broad-based product offensive, increased electrification, new approaches to engineering and manufacturing, the adoption of new technologies, and the use of strategic partnerships to increase global unit sales and improve profitability.
The plan is positioned as a bridge between the Nissan NEXT business transformation plan running from FY2020 through FY2023 and Nissan Ambition 2030, the company’s long-term vision. The new plan is split into mid-term imperatives for fiscal years 2024 through 2026, and mid-long-term actions to be carried out through 2030.
Makoto Uchida, President and CEO, Nissan said: “The Arc plan shows our path to the future. It illustrates our continuous progression and ability to navigate changing market conditions. This plan will enable us to go further and faster in driving value and competitiveness. Faced with extreme market volatility, Nissan is taking decisive actions guided by the new plan to ensure sustainable growth and profitability.”
Under the two-part plan, Nissan will first take actions to ensure volume growth through a tailored regional strategy and prepare for an accelerated transition to EVs, supported by a balanced electrified/ICE product portfolio, volume growth in major markets and financial discipline.
Through these initiatives, Nissan aims to lift annual sales by 1 million units and increase its operating profit margin to more than 6%, both by the end-FY2026. This it says will pave the way for the second part of the plan, which is aimed to enable the EV transition and realise long-term profitable growth, supported by smart partnerships, enhanced EV competitiveness, differentiated innovations and new revenue streams. By fiscal year 2030, Nissan sees a revenue potential of 2.5 trillion yen (Rs 152,500 crore) from new business opportunities.
In the next 3 years, the company aims to launch 30 new models of which 16 will be electric, and 14 will be ICE models, to meet the diversified customer needs in markets where the pace of electrification differs. Furthermore, it plans to launch a total of 34 electrified models from fiscal year 2024 and 2030 to cover all segments, with the model mix of electrified vehicles expected to account for 40% globally by fiscal 2026 and rise to 60% by the end of the decade.
Amongst the global plans, Nissan says it will launch 3 all-new models in India and also wants to make the country a hub for exports, at a level of 100,000 units. The automaker says it will harness strategic partnerships to stay competitive and offer a global portfolio of products and technology.
Nissan will also continue to leverage the alliance with Renault and Mitsubishi Motors in Europe, LATAM, ASEAN and India. In China, Nissan will fully utilise its local assets to meet the needs of China and beyond; and explore new partnerships in Japan and the U.S. Batteries will be developed and sourced with partners to bring 135 gigawatt hours of global capacity.
The Japanese automaker states that underpinning the plan is its firm financial discipline, enabling stable CAPEX and R&D investment ratio versus net revenue of between 7% to 8% excluding battery capacity investment. Additionally, Nissan plans to invest more than 400 billion yen (Rs 24,400 crore) in battery capacity. Meanwhile, investment in electrification will increase progressively, becoming more than 70% by fiscal year 2026.
Managing these investments is aimed to allow delivering benefits to all stakeholders, with Nissan maintaining positive free cash flow before M&A – even after electrification investments. This is to secure total shareholder return at more than 30%. Nissan aims to maintain net cash at a healthy level of 1 trillion yen (Rs 61,000 crore) throughout the Arc plan period.
