Nissan to Shut Down Two Design Centers, Eliminate 20,000 Positions Globally in Cost-Saving Initiative
Nissan Motor Co. has unveiled a comprehensive cost-reduction strategy aimed at improving profitability and streamlining operations. Led by CEO Ivan Espinosa, the plan involves a multi-tiered approach that promises to transform the company's approach to business.
At the heart of the strategy is a significant reduction in the development time for derivative models. Whereas it currently takes 52 and 50 months to develop these models, the new initiative aims to cut this down to just 30 months.
The company's design network is also undergoing a transformation. Nissan is consolidating its studios, closing facilities in San Diego, California and São Paulo, Brazil by March 2026. The Atsugi design facility in Japan will become the lead studio for global markets, while Studio Six in Los Angeles will take over U.S.-focused design responsibilities for Nissan and Infiniti models. The London design centre will continue supporting the Africa, Middle East, India, Europe, and Oceania region and collaborate with Renault. Design centres in Shanghai and Tokyo will remain, with the former dedicated to the Chinese market and the latter focusing on brand and lifestyle projects.
Tatsuzo Tomita, appointed as head of Nissan's total delivered cost transformation, has led a task force of 3,000 employees that has produced over 4,000 cost-saving proposals. Of these proposals, 1,600 have been approved for implementation, with initial rollouts scheduled before the end of 2025.
Nissan is also pivoting to a leaner, more agile structure, using collaborative planning methods such as the traditional Japanese 'obeya' approach. The company aims to cut parts complexity across its vehicles by up to 70%.
In addition, Nissan plans to reduce the number of vehicle platforms from 13 to seven by the mid-2030s. This reduction in platform variety is expected to lead to significant cost savings and increased efficiency.
The cost-cutting program does not equate to decontenting, according to Tatsuzo Tomita. Any ideas affecting customer-facing features at Nissan are reviewed for market impact and consumer expectations before being approved.
Nissan's cost control efforts come after years of pursuing volume-driven growth. The company aims to cut 20,000 jobs globally as part of a cost-saving plan to reduce fixed and variable costs by approximately $4.7 billion CAD by the end of fiscal year 2026.
Supplier collaboration is critical in Nissan's cost-cutting efforts, with 80% of the proposals involving suppliers directly. Nissan is increasing its use of Chinese suppliers, who offer cost efficiencies by producing parts at scale.
The details of any companies that have started or intensified their collaboration with Nissan within the cost-cutting program were not available at the time of this report.
Despite the significant changes, Nissan remains committed to its mission of providing innovative, high-quality vehicles to customers around the world. The company's cost-cutting initiatives are a strategic move towards a more sustainable and profitable future.
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