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Nissan Motor Co Ltd reported its financial results for the second quarter of 2025, revealing a net loss of €222 million. Despite the loss, the company plans to introduce nine new models by fiscal year 2027, aiming to boost its position in the competitive automotive market. The company’s stock remained unchanged in the latest trading session, reflecting a cautious market sentiment.
Key Takeaways
- Nissan reported a net loss of €222 million for Q2 2025.
- The company plans to launch nine new models by FY2027.
- Total unit sales declined by 7.3% year-on-year.
- Nissan’s automotive free cash flow was negative at €593 million in H1.
- The company aims for a positive automotive operating profit by FY2026.
Company Performance
Nissan’s performance in the first half of 2025 showed significant challenges, with a consolidated net revenue of €5.6 billion and an operating loss of €28 million, which was better than expected. The automotive business generated €4.9 billion in revenue. However, the company experienced a negative automotive free cash flow of €593 million, highlighting liquidity concerns despite having €3.6 billion in total liquidity.
Financial Highlights
- First half consolidated net revenue: €5.6 billion
- Operating loss: €28 million
- Net loss: €222 million
- Automotive business revenue: €4.9 billion
- Automotive free cash flow: Negative €593 million
- Total liquidity: €3.6 billion
Outlook & Guidance
Looking ahead, Nissan forecasts a full-year sales decline of 2.9%, with approximately 3.25 million units expected to be sold. The company projects a net revenue of €11.7 billion and an operating loss of €275 million. Nevertheless, Nissan remains optimistic about achieving a positive automotive operating profit by FY2026, driven by new product launches and cost-saving measures.
Executive Commentary
Ivan Espinosa, CEO of Nissan, emphasized the company’s strategic focus on growth and innovation, stating, "We are prepared for second half growth, leveraging new launches, operational improvements, and disciplined execution." He also highlighted the importance of partnerships in advancing Nissan’s technological capabilities: "These partnerships are strategic moves that position Nissan at the forefront of intelligent mobility."
Risks and Challenges
- Declining sales in key markets such as China (down 17.6%) and Japan (down 16.5%).
- Negative automotive free cash flow and liquidity concerns.
- Potential production and supply chain disruptions.
- Competitive pressures in the automotive industry.
- Economic uncertainties impacting consumer demand.
Nissan’s Q2 2025 earnings call outlined both challenges and strategic initiatives aimed at turning the tide in the coming years. While the company faces significant hurdles, its focus on innovation and partnerships could prove pivotal in achieving its long-term goals.
Full transcript - Nissan Motor Co Ltd (7201) Q2 2026:
Lavanya Vadgaonkar, Corporate Executive for Global Communications Office, Nissan: Good evening, everyone. I’m Lavanya Vadgaonkar, Corporate Executive for Global Communications Office. Welcome to Nissan’s First Half Financial Results for Fiscal Year twenty twenty five. Along with financial year results today, we will be presenting an update on Renison. Today’s session is for forty five minutes and is held on-site as well as online.
First, let me start with the introduction of the speakers today: Ivan Espinosa, Chief Executive Officer Jeremy Paffin, Chief Financial Officer. We will begin with the presentation, so I’ll hand over to Ivan. Ivan?
Ivan Espinosa, Chief Executive Officer, Nissan: Thank you, Lavanya. Hello, everyone. Thank you all for your continued support. It was a pleasure to meet and host many of you at the Japan Mobility Show. Before we begin, I want to emphasize that Re Nissan is on track, and I am grateful to all who have shown patience and trust during these decisive actions.
Despite ongoing challenges and volatility, we remain focused on recovery. Today, Jeremy will present our first half performance, second quarter results and full year outlook. I will then update you on the reneissance progress before the Q and A. So Jeremy, please.
Jeremy Paffin, Chief Financial Officer, Nissan: Thanks, Ivan. Building on the disciplined approach, our cost control measures are showing encouraging signs amid a challenging environment. Now let’s take a closer look at our Retail sales results. Total unit sales reached about €1,500,000 in the first half, down by 7.3% year on year. Second quarter sales, excluding China, were down by 3.6, an improvement over the first quarter.
We are already seeing clear acceleration in Q2 with North America delivering stronger results and China posting year on year growth since the month of June for the first time in fifteen months. North America saw acceleration with 2% growth overall and 6.7% in Q2. U. S. Sales were flat, Mexico up 8%, maintaining market share leadership.
China sales declined by 17.6% in H1 but have grown year on year for five months led by M7 demand. Japan dropped by 16.5% in H1, but our showroom traffic has been recovering from a low point reached in July, thanks to marketing and dealer program initiatives. Europe and other markets had temporary declines from model year changeovers and increased competition. First half consolidated net revenue was about €5,600,000,000,000 with an operating loss of EUR 28,000,000,000, better than we had expected. Net loss was EUR $222,000,000,000, largely due to lower equity method income, impairments of assets and restructuring costs.
The automobile business revenue was about EUR 4,900,000,000,000.0, driven by foreign exchange effects and lower wholesale volumes impacted mainly by tariffs. R and D spending was controlled at EUR $275,000,000,000 through disciplined resource allocation, some project deferrals, thanks to a shortened development schedule and optimized hourly engineering costs. Our operating loss widened to minus EUR 177,000,000,000. Automotive free cash flow was negative EUR $593,000,000,000 in H1, but Q2 performed better than expected at negative $2.00 €2,000,000,000 At the end of the period, net cash stood close to 1,000,000,000,000 yen Importantly, we maintained solid liquidity at 2,200,000,000,000 in automotive cash and equivalents and unused committed credit lines at €2,300,000,000,000 This slide shows the year on year operating profit variance factors. Foreign exchange had a negative impact of about €65,000,000,000 driven by weaker U.
S. And Canadian dollars as well as the Argentinian peso and Turkish lira. Raw material costs were slightly positive at €3,000,000,000 while tariff had a negative impact of €150,000,000,000 Sales performance contributed €24,000,000,000 but negative volume was offset by a favorable mix. Together, volume and mix delivered EUR 62,000,000,000 improvement. However, competitive pressures continued to weigh on incentives.
Monozukuri improved by €67,000,000,000 as the Rennes sand recovery plan delivered cost savings alongside lower R and D spend and purchasing efficiencies. Inflation absorbed €50,000,000,000 moderating the overall benefit. One time items added EUR 65,000,000,000, mainly due to lower warranty costs recognized in Q1 and reduced U. S. Emission expenses recognized in Q2.
Other items, including sales finance and remarketing expenses, added €45,000,000,000 We achieved a positive impact on G and A costs through Renison initiatives. Taken together, these factors resulted in an operating loss of €28,000,000,000 for the first half. I will now move to the outlook for the remainder of the fiscal year. For the second half, we anticipate a strong rebound in volume driven by new products and marketing initiatives. In China, demand for N7 is encouraging and sales are expected to exceed previous outlook by 13%.
North America is expected to sustain momentum, and we will intensify our efforts in Japan, Europe and other markets. Although the first six months showed a year on year decline, we are confident the next half will deliver growth. The markets remain challenging, but the industry volumes are stable. Our full year sales forecast remains unchanged at about 3,250,000 units, representing a 2.9% decline year on year. We are adjusting our outlook to reflect the positive developments ongoing in China, but we are reducing our consolidated retail sales to account for the lower performance of the first half.
The production is projected to remain around 3,000,000 units as we maintained a very disciplined inventory management and actively managed supply risk. Recent launches and model enhancements will strengthen the lineup and attract customers in H2. Operational improvements, including a third shift at Nissan Chatai Kyushu, will boost output. Net revenue is expected to be about €11,700,000,000,000 for the current fiscal year. As outlined in our revised outlook last month, we anticipate a full year operating loss of about EUR $275,000,000,000, breakeven before the impact of tariffs.
Our operating profit outlook includes €25,000,000,000 for assumed supply risk, which we will revisit as the situation evolves. We are still evaluating the impact of Reni San, so we are not of Reni San initiatives and we are not providing a net income outlook today. The forecast is based on an exchange rate assumption of JPY 146 per dollar. Let me outline the factors behind our operating profit forecast. Compared to last year’s JPY 70,000,000,000 operating profit, we expect significant headwinds from tariffs and currency.
On the positive side, we anticipate benefits from an improved product mix and continued support for our U. S. Built models. Year on year, we expect cost improvements as ReniSA initiatives take hold even amid inflationary pressures. Tariff related car flow adjustment will add cost in the second half, limiting manufacturing efficiency gains, but we are expecting savings in logistics, R and D and purchasing.
One time positives include lower warranty provisions and reduced emission penalties. Overall, we forecast an operating loss of €275,000,000,000 for the year. We remain disciplined in our balance sheet management, and we are retaining sufficient liquidity. Total liquidity is about €3,600,000,000,000 with €2,200,000,000,000 in cash and €2,300,000,000,000 in unused credit lines. Year end automotive debt is forecast at about €2,100,000,000,000 fully in line with our initial plans, and this is following the successful refinancing in of €700,000,000,000 in debt maturities this year.
Let me now hand over to Ivan.
Ivan Espinosa, Chief Executive Officer, Nissan: Thank you, Jeremy. I will briefly recap H1 performance and the outlook. First, on sales performance, despite volatility and competition, we stay resilient. Q2 declines narrowed, signaling stability. North America showed strong Q2 growth.
Retail non EV share has risen for three straight quarters and continued in October. China turned positive since June, while Japan and Europe experienced some softness, but we expect recovery with upcoming launches and dealer programs. Second, on financial performance, we possess EUR 3,600,000,000,000.0 of total liquidity. Over EUR 80,000,000,000 in fixed cost savings were achieved in H1 through Reni’s and recovery initiatives. While tariffs and currency headwinds pressure profitability, disciplined cost management and structural efficiencies continue to deliver benefits.
Finally, the outlook. We anticipate a stronger second half driven by re Nissan product led growth and momentum from Q2. We remain on track for operating profit breakeven, excluding the tariff impact. We target EUR 1,000,000,000,000 net cash at year end and expect positive auto free cash flow in H2. We will balance optimism with prudent risk management as we navigate challenges.
In short, we are prepared for second half growth, leveraging new launches, operational improvements and disciplined execution. Building on this momentum, let’s turn to the strategic update. While navigating a challenging environment, Nissan is advancing steadily through reNissan, redefining our strategy, accelerating innovation and reinforcing the foundations for sustainable growth. We have been driving a transformation that goes beyond tackling current challenges to redefining our future. It rests on three powerful drivers: first, disciplined cost reductions to strengthen our financial base second, a bold redefinition of markets and products to deliver what customers truly want and third, reinforcing partnerships that unlock scale and efficiency And with clear target, returning to positive automotive operating profit and free cash flow by fiscal year twenty twenty six, excluding tariffs.
And we know what it takes to get there. That’s why we’re targeting EUR 500,000,000,000 in savings, split between variable and fixed costs to reshape our cost structure and strengthen our competitiveness. Let me take you through how we are tracking against these targets. Over the course of this year, our variable cost reduction initiatives have gained notable momentum. As of November 2025, we have generated 4,500 ideas, identifying a potential impact of JPY 200,000,000,000, a progressive leap from JPY 75,000,000,000 in May and JPY 150,000,000,000 in July.
Over two thirds of these ideas are technical solutions like redesigning headlamps for efficiency or optimizing seat designs to cut material costs. Major cost reductions target high volume models like Rogue, Kicks globally, Pathfinder in North America and Sirena in Japan. Every action upholds our commitment to quality with no compromise on safety, reliability or performance. We are advancing in manufacturing and logistics, including parts diversity reduction and supplier collaboration. Encouragingly, ideas are maturing with more moving from concept to implementation.
This structured approach ensures credible, sustainable savings embedded in design and operations, always with quality as a top priority. We have delivered over EUR 80,000,000,000 in fixed cost savings in H1, a strong start. We aim to exceed EUR 150,000,000,000 by fiscal year end and surpass €250,000,000,000 by fiscal year twenty twenty six. In manufacturing, we have completed six of seven targeted site actions with Compass, the sixth plant, ending production later this month. On engineering, we are progressing towards our 20% cost per hour reduction target, currently running at 12%.
Parts complexity reduction is delivering also strong results, complemented by OBAYA activities with models like the next generation Rogue using 60% fewer parts. We are also optimizing assets to unlock value for transformation. A key step is our global headquarters in Yokohama. We will proceed with a sale and leaseback transaction under a twenty year agreement. This ensures Nissan’s continued presence and commitment to Yokohama while ensuring no impact on employees or operations.
Part of the proceeds will fund critical investments like accelerating AI driven systems, digital modernization and transformation initiatives while preserving our ability to invest in innovation and growth. These steps go beyond cost. They create a leaner, more agile Nissan ready to compete and win. We have made strong progress on cost actions and now the momentum is shifting towards the next two drivers of re:Nissan, redefining our product market strategy and reinforcing partnerships. On product lineup, our product lineup tells the story.
From the award winning LEAF to the new generation RUX K car, we are gaining traction. Between now and fiscal year twenty twenty seven, we will be introducing nine new models. As we look ahead, our product strategy rests on three pillars: heartbeat models, icons that showcase Nissan’s DNA and innovation like the globally recognized LEAF Core models, vehicles that lead in key markets such as the Qashqai e Power with class leading fuel economy and the KIX, recently named Best Buy 2025 in Brazil. Partnership models are collaboration that strengthen our reach, including the N7 with 40,000 units sold in China and the RUX K Car with 15,000 presales in just six weeks. Finally, I want to stress the importance of partnerships for our future.
Many of our products, as I mentioned earlier, reflect the strong power of collaboration. Now coming to partnerships in technology, these are critical to strengthening our presence in next generation mobility. In recent months, we have announced several initiatives, a tie up with Boldly, Premier Aid and KQ Corporation to pilot autonomous mobility services here in Yokohama collaboration with Wave, The UK pioneer of AI driver software, to set new standards for driver assistance in our next generation ProPilot technology And in China, our new Tiana features advanced intelligent connectivity, becoming the first ICE vehicle equipped with Huawei’s Harmony Space five point zero smart cockpit. These partnerships are more than projects. They are strategic moves that position Nissan at the forefront of intelligent mobility.
In conclusion, our first half results reflect the challenges we face, but they also confirm that Nissan is firmly on the path to recovery. We have made meaningful progress. And while there is more to do, the foundation for future success is in place. Having implemented decisive cost saving measures to secure profitability, we are now accelerating forward, prioritizing new products, key markets and breakthrough technologies that will define our next chapter. The second half will bring challenges, but with focus, discipline and the actions we are taking, I am confident we will deliver strong results.
We have the right strategy, the right products and the right team to capture growth and create value. Together, we will navigate the road ahead and with confidence, seize the opportunities and lead with innovation. Thank you for your attention. With that, we will now take your questions.
Lavanya Vadgaonkar, Corporate Executive for Global Communications Office, Nissan: Thank you, Ivan. We will now open for questions. If you have a question, please raise your hand and the team will come to you with the mic. Give me a second. I already see a lot of hands going up.
Just keep the questions to two per person so that we manage time. So we go with maybe the first front row middle with the gentleman.
Various Journalists, Various Media Outlets: UNIDENTIFIED Best car, my name is Terasaki. Thank you for this opportunity. I have two questions. The first question is as follows. Last week, Japan Mobility Show started.
And here, you have a stand, new L Grand and new Patrol were displayed in the show. Espinosa san, you made the presentation personally. That’s what I heard. What’s the reaction of the people who saw it? And what’s your opinion about the overall show?
This is my first question to Ivan san. And the second one, partnership. Was it since last fiscal term with Honda, you have been well, tie up is kind of went back to scratch, but you are trying to continue with the collaboration with Honda. What is the progress so far to the extent that you can disclose? These are the two questions.
Thank you.
Ivan Espinosa, Chief Executive Officer, Nissan: Okay. So thank you. Thank you for your questions. On the Japan Mobility Show, first of all, thank you for visiting. I really enjoyed the show and having the opportunity to guide many of you through the booths and show you what Nissan is capable of doing.
Then as for the reaction, the reaction has been extremely positive, both for El Gran and for Patrol. The level of buzz that we are seeing and I have some numbers for you actually. The conversations on social network is spiked by 15 times versus the normal average that we have. And out of that, we have 35% positive sentiment in total, which is a 25% increase versus where we were before. So clearly, the products are well received and Nissan is starting to become attractive to customers again, which was exactly the goal.
It’s exactly the goal of the second phase of our re Nissan program. As I’ve mentioned before, the first step was about cost and restructuring. Now we are shifting gears into the second phase, which has to do with product, market strategy updates, innovation and technology. As for the partnership with Honda, well, we keep discussing with them, as I have said before, on several projects. There’s nothing that we can disclose at the moment, but we keep discussing with them opportunities in several fields as we outlined in previous announcements.
Thank you. Thank you for the question.
Lavanya Vadgaonkar, Corporate Executive for Global Communications Office, Nissan: Thank you. Take the question from the right side.
Various Journalists, Various Media Outlets: Thank you. Toyo Keizai. My name is Hata. There are two questions from me. The first one is the regional breakdown of the sales.
China and U. S. Are better, but how about Japan and Europe? There’s a decline, which is continuing in Europe and Japan. Sunderland and Doji, what is the utilization rate so far?
And Leaf and Micra, you are going to introduce new cars. You are talking about the second stage of re Nissan, Europe and Japan. When will it grow the volume when will the volume in these two regions grow? This is my first question. And the second one is the objectives of the re Nissan.
In May, when you devise a plan in fiscal year twenty twenty six, automotive profit and free cash flow will be the positive. That’s what you said. But you said that you didn’t talk about excluding tariffs, but now you are saying it’s excluding tariffs. Does that mean that you made a downward revision on the goal for 2026?
Ivan Espinosa, Chief Executive Officer, Nissan: So let me start with the first question. So the volume, as we explained earlier, in Europe and Japan was soft on the first half. Europe had some impact from the model changeover. So we were on the run out of the previous Qashqai and entering with a new Qashqai that has a third generation e power. So we expect Europe pick up in the second half now that we are launching full blast the third generation e power, which has been very positively received and evaluated by media.
In Japan, we had a slow first half and for several reasons. One, of course, the impact of media and communications, the negative media coverage that we had in the first half because of the situation that we went through. This had an impact on showroom traffic, and customers were weary of Nissan situations because of this financial condition. Now we are seeing change. We see, as I mentioned before, sentiment from the public is changing towards us.
They are understanding that Nissan is a great company that makes great cars and we start to see the positive sentiment changing. A lot of this, thanks to your support as well as media because you have been providing a lot of support to us. And we see that the sentiment is changing. The showroom traffic starts to improve. And proof of that is also the very strong reception to RUX, around 15,000 orders received in only six weeks.
So this signals that we can start bouncing back, and we expect a strong bounce back in Japan as well in the second half. As for the objectives, the objectives have not changed. The fact that we are now clarifying tariffs is because we didn’t know when we announced at the beginning for how long tariffs will be remaining. We thought initially as many in the industry that it was a temporary thing. But now that this is here to stay, it’s we are just recognizing that the tariffs will have to be managed and that this is not a downward revision.
It’s just a clarification of what we expect BOUVIGNIES:] for next year. Thank you for the
Jeremy Paffin, Chief Financial Officer, Nissan: Yes. On FY 2026 guidance, there is absolutely no change, fully in line with what we had announced in the month of May.
Lavanya Vadgaonkar, Corporate Executive for Global Communications Office, Nissan: You. If I go to the last left side, first row.
Various Journalists, Various Media Outlets: Thank you for the presentation. Yomiuri Newspaper. My name is Sakamura. I also have two questions. First of all, Reni san.
So far, 20,000 people headcount reduction was talked about. In which country will you be reducing headcount? In what degree? Can you substantiate that plan and give us an update on the substance of that plan? Second question, new model introduction.
In China, N7 is doing very well. So in the future, China produced cause exporting to other countries. I thought that you were studying such possibility. How far has that study gone? And is there a possibility for export to Japan?
Thank you.
Ivan Espinosa, Chief Executive Officer, Nissan: UNIDENTIFIED Thank you. Thanks, Sakamura san for the question. So on headcount on your headcount question, what I can tell you we are not providing a breakdown. What I can tell you is these numbers that we announced are global, and we are tracking according to our plan. So the plan is ongoing, and we are tracking according with our expectations in terms of speed and size of adjustment of the workforce.
But we are not providing details on the breakdown. As for the new model, N7 and future exports, the answer is yes. We are working on exports plan. You maybe heard we established already an export JV company that will help us enable and facilitate and speed up this. And we are looking at several products that we have a potential and we are looking at different market options.
But nothing specific to share today. But the answer is yes, we will be exporting cars because this is part of our strategy to defend ourselves outside of China, bring more scale to our China operations also and use the speed of China in terms of development, technology and costs to defend ourselves in markets where Chinese OEMs are being aggressive. So this is what we are set to do. Yes. Thank you for the questions, Agnes.
Lavanya Vadgaonkar, Corporate Executive for Global Communications Office, Nissan: Thank you. If I move to the second row in the middle. Yes, please.
Various Journalists, Various Media Outlets: Shinzak Dush, Tokyo, Channel Seven. The question to CEO, Spinosa. So in relation to the previous question, you have a commitment of achieving operating profit in the automotive business by fiscal year twenty twenty six. However, net income forecast has not been disclosed with a massive loss in fiscal year twenty twenty five. Can this target be met?
Can it be achievable in time? I think that Mr. Papa has already answered that question partly, but I need to I need answer from Mr. Espinosa and a strong message and your commitment. And the second question is very simple.
So you emphasized the change of the atmosphere around Nissan. Does it mean the darkest hours of Nissan is over or still to come, the darkest time of Nissan is over or not? Thank you.
Ivan Espinosa, Chief Executive Officer, Nissan: Thank you. So for me, the important thing is to have customers looking at Nissan with eyes that represent what Nissan is capable of doing. And Nissan is a company that has over 100,000 employees working very hard to create great products. And that’s proof of what we saw in the Japan Mobility Show. It’s evidence and proof that this company, our company, is a great company that can deliver great, exciting products.
This is what we’re focusing on and this is what our people with a lot of love for our company are doing every day. As for your question on OP, the answer is yes. We are committed to deliver what we said. And proof of that are the numbers that we just explained to you. I think we have a couple of good examples.
As we said, on the fixed side, we have achieved already more than JPY 80,000,000,000 in the first half of savings. We are on good track to achieve JPY 150,000,000,000 by the end of this year, and we are confident that we can overachieve JPY $250,000,000,000 next year that we have committed to achieve. And on the variable cost side, as mentioned, the progress is very consistent, gradually growing the impact or potential that we see, now reaching JPY 200,000,000,000 versus the JPY 75,000,000,000 that we had in May and the JPY 150,000,000,000 that we had in July. So again, this is evidence that the company efforts is bringing fruits. So this gives us confidence to achieve the objectives that we have set for ourselves next year.
Thank you for the question.
Various Journalists, Various Media Outlets: The darkest hour is over or still to come?
Ivan Espinosa, Chief Executive Officer, Nissan: Well, I don’t know what you mean by the darkest hour. Again, for me, the important thing is to change the customers’ minds and have them look at Nissan as a great company that it is. Thank you.
Lavanya Vadgaonkar, Corporate Executive for Global Communications Office, Nissan: Thank you very much. We stay in the middle. If we go to the third.
Various Journalists, Various Media Outlets: Ochan, Nikkei, Newspaper. I have two questions. First, Expedia Semiconductor Manufacturer impact, OPMA QUIUXU reduction has become clarified, but how much impact are you foreseeing in terms of volume? What’s the maximum reduction? And are you thinking of alternative purchasing?
So what’s the progress in terms of choosing an alternative? Secondly, how do we interpret volume? N7 was better than expected. So there was hit, but the full year volume is unchanged and minus from 2024, and sales has been revised downward. So top management, how confident are you on the second half?
UNIDENTIFIED And you
Lavanya Vadgaonkar, Corporate Executive for Global Communications Office, Nissan: will continue to introduce new models next year, but are you do you think that, that will really have a positive impact? What’s your level of
Ivan Espinosa, Chief Executive Officer, Nissan: Thank you. So I will answer the second question and then let Jeremy elaborate on the first one. On the confidence on the H2, I think there’s two elements to consider, not only the new car launches, but the fact that in North America as well as in China, from the second quarter, we already start seeing growth. So we have seen consistent growth in North America and The U. S.
Particularly. I can tell you our retail share in non EV has quarter over quarter grown. If you look at the numbers, Q3 twenty twenty four, we trailed at 4.3%. Q4 twenty twenty four, we were at 4.8%, and now we’re running at 5.3%. So this is proof that the performance is improving, thanks to the focus that we have put in our marketing and sales activities and the products that we are rolling out in The U.
S. Then Japan, as mentioned, we had a slow H1, so that’s why we believe we will not be able of recovering the full year estimate, but we expect a strong bounce back in the H2. Thanks, as we said, from the good showroom traffic improvement that we see, the positive sentiment from the consumers that they are placing again their confidence in our brand and our company. And again, proof of that is the very good reception and the preorders of the all new Nissan books. So that’s why we are confident on the second half performance on sales.
Jeremy, you want to elaborate on the first one? Yes.
Jeremy Paffin, Chief Financial Officer, Nissan: The supply risk that we are managing at the moment, there are actually two. One is an aluminum supply issue in North America that is affecting many market participants following the fire at a supplier. The second one is obviously the situation with Nexperia and the shapes that were being banned from export from China, but that ban in the last few days seems to have been lifted. So I would say the situation is extremely fluid, and we are, I would say, managing it extremely closely. This forecast, as I shared with you, includes a 25,000,000,000 yen risk, which we put as a placeholder last week when the situation was quite uncertain.
I would say, as the situation clarifies, should this placeholder be unnecessary, we will be removing it from the forecast.
Lavanya Vadgaonkar, Corporate Executive for Global Communications Office, Nissan: You. Next question. Can move to the middle. Yes, please.
Various Journalists, Various Media Outlets: TV Asahi, my name is Matsuka. Thank you for the opportunity. I have two questions. For this fiscal term, in the first half, how do you assess the first half results of this year? And the sales and leaseback of GHQ without renting it, how by going to the suburbs where you have an R and D center, it would have been more beneficial.
What was the thinking behind this? Wasn’t there any opposition from other executives in the company? You. These are the two.
Ivan Espinosa, Chief Executive Officer, Nissan: Thank Thank you for the question. So on the first half assessment, as mentioned, we had a result that came in better than we expected, but it was supported by external factors as well. So we had some onetime events and that are evident that we are doing well, but there’s more work to do. So that’s what we qualified earlier in the presentation. So the plan is on track, but we have to keep working hard in second half to deliver the objectives that we have set for ourselves.
Now as for the sale and leaseback, we discussed at length in the EC, and it’s something that also we reported to the Board. And the best option was to do what we did, the decision that we made, which is trying to minimize the impact on the employees and on the suppliers and on the local economy and having a good business strategy to utilize better our assets, bring some resources in that will help us modernize and go further into digitization, AI implementation and many other things that we have to do, while also it allows us to spend the precious R and D resources that we need for our future, especially in a year where free cash flow will be negative. So this is the these are the considerations that we took for the decision that we made. Thank you. Thank you for the question, Marcelo.
MARCO
Lavanya Vadgaonkar, Corporate Executive for Global Communications Office, Nissan: you. Move to the left side. Yes, please.
Various Journalists, Various Media Outlets: Hi, Yaayi Namijima from Bloomberg. Thank you for the opportunity. Last time during the press conference, Papa san, you said that net loss for this fiscal year, you said the details will be provided in November, if I remember correctly. But this time, you are not going to give a full year guidance for net income. Once again, why are you in this situation?
Was there any change that took place from last time? Is there something that you didn’t see last time to the degree that you can disclose? Could you elaborate why you cannot give a full year guidance of the net income? And Page 16, Global Design Studio is reorganized and Global Information Systems Center is relocated. That’s what it says.
Did you sell assets in these moves? Could you elaborate on these two points?
Jeremy Paffin, Chief Financial Officer, Nissan: So on the net loss outlook, I think the situation is the following. We are at the moment considering further implementation of restructuring actions under Reni San, in particular, accelerating decisions. And as we are working on those options, we just didn’t have a clear enough forecast to share something that was robust enough in order to make a communication. So we want the transparency and we want to provide the guidance, but today was just not the day where we could. And so I think you just need to bear with us and understand that we’re working on assessing further restructuring and implementation of renaissance plans in fiscal year twenty twenty five, and that will have P and L consequences that we are assessing.
On more generally, on the events that you mentioned, I would say that when we free up any assets today, there is a consideration of monetizing the asset if we own it. And so there is just a systematic review. So we will keep you informed as we progress with asset sales or asset or any asset disposal.
Lavanya Vadgaonkar, Corporate Executive for Global Communications Office, Nissan: Thank you. The gentleman in the middle, please.
Various Journalists, Various Media Outlets: Hatanaka of Nippon Broadcasting. Thank you very much. I have a question to Mr. Espinosa. During the mobility, so your group company, Nissan Shatai Shonan plant announcement was released.
You will be using it for to manufacture service components. What’s your take? And did Nissan was Nissan involved in that decision making? And mobility show was very popular. The main L Grand and Patrol, Nissan Kyushu manufactures those models.
So these models will continue to be manufactured in the same way Or will the manufacturing site be transferred?
Ivan Espinosa, Chief Executive Officer, Nissan: UNIDENTIFIED Thank you. As for the Nissan Chatai question on Shonan, I will kindly ask you to ask the question to Shonan. We cannot comment on Nissan Jettai. However, on your question on L. Grant, we are we will be continuously assessing the industrial strategy.
So for the moment, we will start producing in Nissan Jettai Kyushu together with caravan and frame vehicles. As you have seen, the welcoming of Patrol and QX80 is very good globally. So we are currently looking at what options we can have to further increase the capacity of such models because they are performing very well and they are very profitable. Now this as I said, we will continue to explore, but for the moment, there is no intention to move the products out from Nissan Shattai Qsho. Yes.
Thank you for the question.
Lavanya Vadgaonkar, Corporate Executive for Global Communications Office, Nissan: We’ll have time for two or three questions. So next question, please.
Various Journalists, Various Media Outlets: TV Kenagawa, my name is Togashi. Espinosa san, this is a question for you. Nissan Stadium naming rights is the question. Yesterday, Yokohama, Mayor Yamanaka, as of the end of last month, he said that he received a new proposal. Could you elaborate on the proposal that you made to the degree that you can disclose?
But once they renewed the contract at 50,000,000 yen in response to your proposal. But once again, there was an instruction to review the proposal. What’s your approach or thinking behind this?
Ivan Espinosa, Chief Executive Officer, Nissan: So first of all, we This is our home base, our hometown, and we’re going to stay here. This is why we also announced that we will continue to be the largest shareholder in the Yokohama Marinos because it’s an icon of our company and a symbol of pride for many of our employees. With that in mind, we’ve been discussing with Yamanaka San and the city of Yokohama because we want to continue our collaboration in the Nissan Stadium, yes, for the same reason. Now we have made an offer, as you said.
We are discussing now with Yamanaka san and the team and the city, and we will
Lavanya Vadgaonkar, Corporate Executive for Global Communications Office, Nissan: you when this is concluded. So we will continue discussing with them based on this offer that we provided, but no detail to be shared today. Thank you. Thank you. Next Come to the middle, please.
Various Journalists, Various Media Outlets: Tokyo, my name is Abe. Nissan GHQ will be sold, you said. In reality, you are going to rent it and there will be a rent which will be booked. For twenty years, what is the annual rent that you have agreed on? This is my first question, please.
Ivan Espinosa, Chief Executive Officer, Nissan: So yes, we have agreed to do a sale and leaseback, as I said, and there will be a rent. But we are not going to disclose the level of rent. I just tell you that it’s a good financial decision. It’s a good business decision that will allow us to invest REPRESENTATIVE:] resources in our future. Thank you for the
Lavanya Vadgaonkar, Corporate Executive for Global Communications Office, Nissan: I think we’re right on time. Thank you very much once again for joining us. If you have any further questions, the communication team is available. Please reach to us. Have a good day.
Thank you.
Ivan Espinosa, Chief Executive Officer, Nissan: Thank you.
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