Earnings call transcript: Nissan’s Q1 2025 sees operating loss, innovation push

Nissan Motor Co Ltd (7201) reported a Q1 2025 operating loss of ¥79 billion, which was better than its initial forecast. The company’s consolidated net revenues reached ¥2.7 trillion, while free cash flow was negative at ¥390 billion. Following the earnings announcement, Nissan’s stock price dropped by 2.48%, closing at ¥2.02. According to InvestingPro data, the stock has declined over 10% in the past week, though analysis suggests the company is currently trading below its Fair Value. With a market capitalization of approximately $8 billion, Nissan maintains a prominent position in the global automotive industry.

Key Takeaways

• Nissan reported a Q1 operating loss of ¥79 billion, better than expected.
• Consolidated net revenues stood at ¥2.7 trillion.
• The company is expanding its product lineup with new models across key markets.
• Nissan’s stock fell by 2.48% following the earnings release.
• The company anticipates a Q2 operating loss of ¥100 billion but expects positive cash flow in the latter half of the year.

Company Performance

Nissan’s Q1 2025 performance was marked by an operating loss of ¥79 billion, although this was an improvement over initial forecasts. The company’s consolidated net revenues of ¥2.7 trillion highlight its ability to generate significant sales despite challenging market conditions. However, negative free cash flow of ¥390 billion indicates ongoing financial pressures. In comparison to competitors, Nissan’s focus on innovation and cost reduction may offer a competitive edge, although market challenges persist.

Financial Highlights

• Revenue: ¥2.7 trillion
• Operating Loss: ¥79 billion
• Free Cash Flow: Negative ¥390 billion
• Total Automotive Liquidity: ¥3.1 trillion
• Raised ¥860 billion through bonds

Outlook & Guidance

Looking forward, Nissan expects a Q2 operating loss of ¥100 billion but aims for positive free cash flow in the second half of the year. The company is projecting net revenue of ¥12.5 trillion for the full year. While carrying a significant debt burden of $58.4 billion, Nissan maintains a healthy current ratio of 1.49, indicating sufficient liquidity to meet short-term obligations. Strategic initiatives include expanding its product lineup, with new launches planned across Japan, the U.S., Europe, and China. Get comprehensive analysis of Nissan’s financial outlook and debt management strategy through the detailed Pro Research Report, available exclusively on InvestingPro.

Executive Commentary

Jeremy Papin, CFO, emphasized the company’s commitment to its recovery plan, stating, "Re Nissan is more than a plan, it’s a company-wide commitment." CEO Ivan Espinosa highlighted the company’s focus on quality, saying, "When you make a good car, then you can really still hit strong with the Nissan brand." Espinosa also noted, "We are executing a comprehensive recovery across three key drivers."

Risks and Challenges

• Supply chain disruptions could impact production and delivery schedules.
• Market saturation in key regions may limit growth opportunities.
• Economic pressures in China, with sales down 27.5%, pose a significant challenge.
• Cost reduction efforts may face internal resistance or operational hurdles.
• Currency fluctuations could affect financial performance, particularly in export markets.

Nissan’s Q1 2025 earnings call highlighted both the challenges and opportunities facing the company. While the operating loss and stock price drop reflect investor concerns, the company’s strategic focus on innovation and cost reduction could pave the way for future growth.

Full transcript - Nissan Motor Co Ltd (7201) Q1 2026:

Lavanya, Moderator/Host, Nissan: Good evening, everyone. Welcome to Nissan’s First Quarter Financial Results for Fiscal Year twenty twenty five. Today, along with financial results, we will also cover ReNissan progress. Today’s session will be for forty five minutes and is held on-site with live streaming. First, let me start by introducing the speakers for today, Ivan Espinosa, Chief Executive Officer Jeremy Papin, Chief Financial Officer.

Before I hand over to our CEO, I will explain the flow for today’s session. First, Ivan will provide an update on our Rinne San recovery plan, followed by Jeremy will then cover financial results for the three month period ending June 30 and our outlook. We will then take your questions. Let me hand over to Yvonne.

Ivan Espinosa, Chief Executive Officer, Nissan: Thank you, Lavanya. Good evening, everyone. I hope all you are safe in light of the tsunami warning. Please take all necessary precautions and stay close to your loved ones. Eleven weeks ago, I announced the reneasum plan and outlined the scale of our recovery efforts.

Since then, we’ve made meaningful progress. We have a clear understanding of the work ahead and have mobilized teams across the organization to execute the plan with discipline and urgency. While our financial results for FY twenty five, especially h ’1, reflect the magnitude of the challenge we face, they also reinforce why the re Nissan transformation is so critical and why our disciplined approach must continue. Let me begin by recapping the plan and detailing the concrete actions we have taken so far. As a reminder, the focus of Renison is to restore profitability and achieve positive free cash flow by fiscal year twenty twenty six.

This is not the final goal, it is the foundation. To drive a robust and sustainable recovery, we are executing a comprehensive recovery across three key drivers. We are implementing measures to reduce costs. We are redefining our approach to products and markets by aligning offerings more precisely with the real market demand. And we are reinforcing key partnerships to unlock economies of scale and deliver value at significantly lower cost.

Today, I will update progress on two drivers. First, reducing costs. We are reshaping our cost structure aiming to save JPY 500,000,000,000 through both fixed and variable cost reductions. We have taken a decisive action to reduce variable cost, and the office is now driving this transformation forward with speed, discipline and measurable impact. The Obeya team brings together 300 specialized experts backed by 3,000 colleagues who have temporarily shifted from long term product work.

For three months, they are focused entirely on reengineering how we approach cost reductions working in fast paced sprints to deliver impact quickly. The team has already generated over 4,000 cost saving ideas, 1,600 of which are now implementation ready. We have already identified actions that are giving us visibility in two thirds of the net cost savings, underscoring our commitment to disciplined cost management and rapid delivery. In addition, we are eliminating inefficiencies that still exist in some areas and challenging legacy practices with discipline and urgency. The momentum is real, and the transformation is underway.

We’re still in the early stages of our recovery, but we are already making steady progress in reducing fixed costs. Of the seven manufacturing sites we plan to reduce from our footprint, five have already been announced. To go through these again, production in Argentina of the Frontier and Navara pickups is being transferred to Mexico. We have sold our 51% in our joint venture plan in India to our partner Renault, which will continue to produce Nissan vehicles in the future. Here in Japan, we will transfer production from the Opama plant to our Kyushu production base with vehicle assembly in Opama ending by fiscal year twenty twenty seven.

The production of the NV200 van at the Shatai Shonen plant will end by fiscal twenty twenty six, marking the end of Nissan model production at the site. And today, we announced the fifth production site in Mexico. We will transfer production from the CVAC plant to our Aguascalientes production site with vehicle assembly in CVAC ending by fiscal year twenty twenty five. Beyond this, we continue to execute measures for efficiency. And so far, we have consolidated production at the plant in Thailand, moving to a single assembly line and announced changes to shift in U.

S. And The U. K. Plants. To drive fixed cost reductions beyond manufacturing, we have formed a dedicated cost task team.

These efforts are already delivering results. They are showing more than 30,000,000,000 realized in Q1, providing strong visibility for the full fiscal year. We also have a clear road map to achieve our target of 20% reduction in the average engineering costs per hour. The task team is conducting a comprehensive review of expense overheads and auditing capital expenditures across the value chain to ensure every opportunity for cost efficiency is captured. We will continue to update you as we have available updates.

Now moving to the next driver, redefining our product and market strategy. Since the launch of RE Nissan, we have taken decisive steps to reshape our market approach and align our product offering with customer demand across key regions. The models introduced in Q4 of last fiscal year are gaining strong traction, and we are building on that momentum. In Q1 of this year, we introduced additional models, and we will continue to expand our lineup throughout the remaining part of the year and beyond. Highlight for Q1 is our new heartbeat model, the all new Leaf, which will be introduced in The U.

S, Europe and Japan. In addition, we are focused on high demand models, including the next generation K car and the L Grand in Japan. In The U. S, we are expanding our SUV portfolio with the PHEV Rogue alongside the Armada Pathfinder and Infiniti QX60. A new Sentra will also be introduced as a core model for North America.

In Europe, where electrification continues to drive demand, we have launched the Micra EV and the Qashqai with the next generation e power system. In Mexico, Nissan maintained its leadership position with successful launches like Magnite contributing to solid sales and segment dominance. In China, the new n seven NEV is already proving to be a sales success, and we are preparing to export China made vehicles to other markets. Our product offensive is accelerating, and further model announcements are planned for the months ahead. Let me stress again, Re Nissan Recovery is a two year plan, and we are progressing with discipline and intent at the right pace.

Fiscal year twenty twenty five is our transition year, the year in which we are taking decisions as we simultaneously execute actions. These actions are being delivered in structured phases, each with clear milestones and accountability. While we expect to see tangible impact of our variable cost transformation by the end of this fiscal year, we do acknowledge that variable cost will take a bit of time to show in our results. This is due to the nature of changes we need to implement in our operational framework. The consolidation of our manufacturing footprint is on track for completion by fiscal year twenty twenty seven.

We are also working on the consolidation of our powertrain production and will share progress in due course. Our workforce reduction is progressing aligned with the timing of operational changes across locations. In parallel, we are also executing actions to optimize G and A expenses, an area where we are already seeing good progress. Our focus on streamlining development activities is on track with benefits expected to begin showing in the 2027. Now let me conclude with reaffirming that each stage of the reneasum plan is being implemented with discipline, dedication and with a focus on delivering enduring value.

With that, I will hand it over to Jeremy, our CFO, to present results. Jeremy? Thank you, Ivan. Good evening, everyone. As Ivan noted, we

Jeremy Papin, Chief Financial Officer, Nissan: are advancing steadily with Reni San, and that progress is encouraging. At the same time, the magnitude of our challenge remains significant as reflected in our Q1 results, which reinforces the urgency of continued disciplined execution. Let me begin with a brief overview of our Q1 performance. As expected, we had a muted start to the fiscal year with retail sales down 10%. Our operating loss of EUR 79,000,000,000 was better than we had guided in May, thanks to onetime gain and early signs that our fixed cost control are starting to take effect.

Free cash flow was a negative three ninety billion, but our Automotive gross cash position remains solid with more than JPY 2,000,000,000,000. To reinforce our financial flexibility, we raised JPY $860,000,000,000 in July through straight and convertible bonds, fully covering FY 2025 debt maturities. At the June, our total Automotive liquidity stands at JPY 3,100,000,000,000.0, including the JPY 2,100,000,000,000.0 cash on hand and another JPY 1,000,000,000,000 auto cash lent to sales finance. On top of this 100,000,000,000.0 of cash, we also have access to JPY 1,800,000,000,000.0 in committed unused credit lines. Looking ahead, we are maintaining our fiscal year twenty twenty five retail sales forecast.

And we are introducing a Q2 operating loss expected at negative EUR 100,000,000,000. Our free cash flow in Q2 is forecast at approximately EUR $350,000,000,000 negative, with a return to positive territory anticipated in the second half of the year supported with our seasonal pattern. Let me go through the details of the Q1 results. Unit sales in Q1 were down mainly due to continued challenges in China. Competition in China remains intense.

The non premium JV segment continues to shrink and the price war has escalated further. As a result, our unit sales in China dropped by 27.5%. We faced an 11% decline in Japan with returning competition in the K Car segment and consumer hesitations toward Nissan. The 2.4% decline in North America is partly due to our adjustments to the tariff impacts that are reshaping the competitive landscape. In particular, we focused our sales efforts on U.

S. Produced vehicles and prioritized private retail channels while scaling back rental fleet sales. This strategy is beginning traction as seen in month over month improvements in our U. S. Retail market share trend.

A notable highlight is Nissan being ranked the number one mass market brand in J. D. Power’s initial quality survey, an achievement that could positively influence both our brand image and sales performance. In Europe, we saw a 5% decline primarily driven by reduced overall demand for electrification, particularly due to the Leaf full model changeover and the end of production of the NV400. The 9% decline in other markets was mainly driven by the KIX model change in Brazil.

On a positive note, volume growth in The Middle East was fueled by strong demand for the Magnite and the introduction of the new petrol. Proceeding to the right hand side of the chart, our production volumes declined by 14%, primarily due to a 31% reduction in China. This was driven by ongoing restructuring efforts and production optimization, including reduced operating hours and capacity adjustments. In parallel, we are proactively managing lower dealer inventories ahead of the model year changeover in The U. S.

And the launch of new models in Europe and in Japan, aligning production with anticipated demand and managing impacts to our free cash flow. Consolidated net revenues for the period were 2,700,000,000,000.0 yen with an operating loss of 79,000,000,000 yen and a net income loss of 116,000,000,000. Excluding sales and leaseback operation, CapEx was largely flat year over year. And through disciplined control in R and D, we reduced our expenses from JPY 148,000,000,000 to JPY 140,000,000,000. In the core automotive operations, after elimination, revenues were JPY 2,400,000,000,000.0, reflecting lower wholesale volumes as well as a roughly EUR 200,000,000,000 negative foreign exchange impact.

Our operating loss deepened to EUR 158,000,000,000, including a tariff impact of nearly EUR 70,000,000,000. Consequently, free cash flow in the automotive business was a negative EUR $390,000,000,000. This was expected due to seasonal factors, specifically lower payables in Q1 that adversely affected working capital. At the end of the quarter, net cash stood at JPY 1,100,000,000,000.0. The operating loss of JPY 79,000,000,000 for the period reflects some specific factors.

Of these, we were adversely impacted by nearly EUR 40,000,000,000 of ForEx effects, mainly due to the weakening of The U. S. And Canadian dollars. There was a EUR 69,000,000,000 negative impact from tariff. Our sales performance resulted in nearly EUR 5,000,000,000 positive, reflecting positive momentum in volume and mix and incentives and pricing.

However, this was offset by declines in aftersales mainly due to lower wholesale volume. Monozukuri costs resulted in positive EUR 25,000,000,000, burdened by higher variable costs but benefiting from better fixed costs and lower depreciation on production assets. Inflation came in at minus EUR 26,000,000,000. This quarter, we recognized a EUR 29,000,000,000 improvement in onetime item, thanks to revised provisions for warranty cost. Sales finance and remarketing contributed positively year on year with a 19,000,000,000 improvement.

However, we had to accrue costs related to CO2 compliance. Our first quarter operating loss of EUR 79,000,000,000 was better than the initial forecast as we had taken a cautious stance at the start of FY twenty twenty five to account for potential risks. Adjusted for the onetime positive, our underlying Q1 consolidated operating profit stands at negative 109,000,000,000. Several factors outperformed our expectations, including lower tariffs, a greater positive impact from product mix, lower credit losses in sales finance and stronger remarketing results. We also benefited from solid fixed cost reductions.

We continue to actively manage our automotive liquidity. In early July, we issued EUR $660,000,000,000 in euro and dollar straight bonds with maturities ranging from four to ten years and EUR 200,000,000,000 in convertible bonds with a six year maturity. Proceeds from the straight bonds will be used to refinance EUR 700,000,000,000 of debt maturing this fiscal year. The net proceeds from the convertible bonds are intended to be used over the next few years for investment in new products and technologies such as electrification and software defined vehicles. For Q1, prior to the bond issuance, we ended the period with total available liquidity of 3,100,000,000,000.0 This includes $2,100,000,000,000 of auto cash and cash equivalents on hand and around $1,000,000,000,000 of auto cash that is lent to sales finance companies.

In first quarter, sales finance repaid some of the cash borrows from auto while increasing its securitized funding. Additionally, we have EUR 1,800,000,000,000.0 in unused committed credit lines if needed. We maintain ample liquidity for upcoming maturities and to cover our funding needs as we continue to restructure the business. I will now move to the outlook. On volume, we are confirming our previous forecast that we provided in May.

We expect retail sales to reach 3,250,000 vehicles this fiscal year, down by 2.9%, mainly due to a projected 18% decline in China. Sales in Japan, North America and Europe are likely to be flat year on year, while other markets are forecasted to grow 6.6%. As explained by Ivan earlier, we are ensuring our global product momentum. This will enable us to reverse the Q1 and grow our global retail sales starting from Q2 onwards. Production volume is projected to be 3,000,000 units as we continue to manage inventories.

We expect net revenue of 12,500,000,000,000.0 yen for the current fiscal year. But given the external market environment, in particular, the ongoing uncertainty related to tariffs, we are not able to provide a detailed full year forecast. I would like to share our current visibility for the second quarter. Revenue of $2,800,000,000,000 an operating loss of 100,000,000,000 and Automotive free cash flow of negative $350,000,000,000 These results reinforce the urgency of executing the re Nissan plan. At the same time, they show some improvements compared to the first quarter once adjusted for onetime gain.

Let me reiterate Yves’ world. Re Nissan is more than a plan, it’s a company wide commitment. With clear oversight and cross functional execution, it’s helping us rebuild competitiveness. We truly appreciate our employees and partners’ commitment and the support on this journey. Thank you.

Lavanya, Moderator/Host, Nissan: Thank you, Jeremy. We will now open for Q and A. Raise your hand if you have a question, and our team will come to you with a mic. State your name and publication before you ask the question, and we request you to keep to two questions per person to allow for managing the time. May I see the hands up now?

Can we go straight in the middle? Yes. Nikke.

Journalist, Various (Nikkei, NHK, etc.): Yes. I am from Nikkei. My name is Uchi Ai. Thank you very much. I have two questions.

The first question, originally, the Q1 forecast was operating loss of JPY 200,000,000,000 and free cash flow was JPY $550,000,000,000 negative. That was the guidance, but the result is better than these expectations. What were the reasons behind this? What were the positive contributors? Could you give us an elaboration on this point?

This is my first question. And the second one is the impact of the tariffs. Initially, maximum JPY $450,000,000,000 was the exposure that you showed us, if I remember correctly. And since then, there was a reduction in the tariff. But as of today, for the full year, what is the tariff exposure for the full year?

Is it still $450,000,000,000 yen or is it lower than JPY $450,000,000,000? These are the questions. Thank you.

Ivan Espinosa, Chief Executive Officer, Nissan: Yes. Thank you for the question. Maybe I’ll start with the second one, and I will let Jeremy answer the first one. On the tariff, you are right, there is a change, but it’s still not clear to us some of our conditions and when the change for the tariff from Japan to The U. S.

Will come in place. So at the moment, it’s a bit difficult to give a very accurate forecast. But what we can tell you is that the forecast that we see is a worst case scenario will be hitting from JPY $450,000,000,000, that was our original estimate, to JPY 300,000,000,000. This is what we’re seeing now. And we will continue updating the number as the rules for the new tariff come clearer and we will keep updating the market.

Jeremy, would you take the first question, please?

Jeremy Papin, Chief Financial Officer, Nissan: Yes. On the gap between the initial projection for Q1 and the actuals in Q1, I would start by saying that initial projection was a cautious one. And as we had we were managing several risks, the tariff, also a few supplier risk, supply chain uncertainty that did not materialize. In the end, we also benefited in the quarter from a one time gain on this warranty accrual change, thanks to the improved quality of our products. So beyond that, I would say tariff were slightly better and we had good contribution from many various small factors.

I mentioned in my speech credit losses, remarketing, product mix, a number of factors coming in a bit better than expected as well as impact from our fixed cost reduction being slightly stronger than we expected in Q1.

Lavanya, Moderator/Host, Nissan: We move on to the next question. Go to the gentleman over there. Yes, please.

Journalist, Various (Nikkei, NHK, etc.): NHK, my name is Atanaka. Thank you for this opportunity. I have two questions. Earlier, you talked about the sales decline in Japan because the consumers are losing confidence in Nissan or they are hesitant to buy Nissan cars. In order to increase or regain the confidence, what do you need to do?

In Opama plant, in Nissan Shatai Shonan, you are going to stop the production of the vehicle at these entities. Explanation to the employees and suppliers are underway. That’s what I understand. So where are you in terms of progress? And Espinosa san, what kind of things did you hear from these stakeholders?

Espinosa san, was there any impressive examples of VOC that you can can share with us? Thank you very much. These are the questions.

Ivan Espinosa, Chief Executive Officer, Nissan: Thank you. Thank you for the question. So on the sales decline in Japan, what we’re doing is accelerating our product offensive. You have seen the all new Nissan Leaf, which is the first car of a series of cars that will come in Japan. Japan is our home market and is one of the most important, of course.

So these car will be followed by new K car, and we will also have El Grande right after that. And then entering early next year, we’ll have a new Kicks. And as we announced on May 13, we are working on preparing an all new skyline, which will be the first car that will be utilizing our new development process, that is to develop new cars under thirty months. And it’s an icon of speed as a car, and we expect it to be an icon of speed of our company on how we develop cars. So we are very actively preparing this.

And we are, of course, focusing on satisfying our customers’ requirements and bringing very exciting cars. There is a multitude of cars coming into Japan, as I said, in the next eight to twelve months. And I’m sure customers will be surprised with what we’re preparing for them. As for your question on how are we addressing Opama situation, As we said at the beginning, Nissan is very responsible. So we’re moving very quickly, but we’re being fast and decisive, but with responsibility.

And maybe you have seen, I’ve been interacting with many stakeholders throughout the past few weeks. Of course, starting with employees. First action I took right after the decision was made was to have a town hall meeting in Opama to explain them the situation, explain them why the decision was taken, and try to listen to their concern and try to alleviate anxiety. We have also started to engage very actively with the government at the different levels, including national government, government, city of Yokosuka government, and city of Yokohama government. There’s a task force in place in which we are participating very actively, providing appropriate information about the suppliers that are affected.

And we will continue to work with the government in a very transparent manner to manage the situation, as I said, in the most responsible manner, trying to make the transition as smooth as possible. So this is what we are doing in the situation of Opama, which as I said, is a difficult decision that we have to take, but a decision that had to be made. And we will move forward with the plan, with the support of all stakeholders. They have been very, very supportive in our journey. Thank you for the question.

Lavanya, Moderator/Host, Nissan: Thank you. Next question, please. If you can come to the first row, please.

Journalist, Various (Toyo Ke, New Media): Toyo Ke san, my name is Hata. I also have two questions. First of all, regarding the units forecast, 3,250,000, down by 96,000. It hasn’t been adjusted, but there has been a reduction 80,000 in the Q1 and domestic and China has been the blunt. And early June, the performance wasn’t so good.

And Nissan has frequently downgraded the unit forecast, but what’s the probability that your guidance on the second half of units would be right? Secondly, you mentioned the CVAC, and my question is with regards to consolidation in Mexico. It’s the first one. And you’re from Mexico, Mr. Espinosa.

It wasn’t an easy decision, but why CVAC? Could you explain the basis of that decision?

Ivan Espinosa, Chief Executive Officer, Nissan: Thank you. Let me start with the second one. As we have explained before, we are consolidating our footprint from 17 plants to 10. And one of the beauties of a Nissan industrial system is wide coverage that we have around the world. The issue that this system has is that it’s too big.

So we have to or we are trying to keep a very strategic geographical coverage while we resize the system to something that is more manageable for the level of revenue that we are commanding. Now the decision of consolidating in Aguascalientes is because there’s many advantages around Aguascalientes in terms of logistics, in terms of efficiencies that can be found by integrating the operation there. We had originally anticipated to stop some operation in CVAC. So CVAC has two lines, passenger vehicle line, which was already scheduled to stop activities this year. And then when we made the analysis, we found that the most efficient way was to consolidate everything into Aguascalientes.

And this is the reason why we made this again painful decision, as you said, not only because I’m from the region, but because it’s affecting the lives and sustain of families. And this is regardless of where we are operating in the world, the impact is the same. And we will behave in the same way, as I said, with responsibility and caring for the employees trying to support in the best way we can. As for the forecast on the sales, the reason why we’re keeping the number at 3,250 is that, as we explained earlier, we have a very strong product offensive coming. We have cars coming in Japan.

And we have also some cars that will be introduced in The U. S. We see some early signs of good tractions in our retail sales performance in North America in the past months. Year over year, we have a 2% increase on the retail sales. And quarter over quarter, we have a 12% increase on the private retail sales.

So this is giving us, I would say, a prudent confidence that the number can come as we originally planned. This is what I can tell you about the forecast of sales. What complement, Jeremy?

Jeremy Papin, Chief Financial Officer, Nissan: Please. Maybe just to complement on China. The China numbers that you see here are for the calendar year first three months. We consolidate China with a three months lag. In the calendar Q2, the sales in China were actually only down 8% year on year and June was up year on year.

Ivan Espinosa, Chief Executive Officer, Nissan: So June year over year is first time we have growth in the past thirty months. So to give you a bit of a flavor of how the volume is looking recently. And again, it’s with prudent confidence that we see the performance coming in. We move

Lavanya, Moderator/Host, Nissan: on to the next question. Any hand raises? Yes. Can we come to the first row? To the lady, please.

Journalist, Various (Nikkei, NHK, etc.): Thank you so much. I am from Nikkei BP and Nikkei Automotive. My name is Nagaba. In re Nissan program, I have two questions. The first question is as follows.

As part of cost reduction, reduction, Nissan’s Canton plant pickup trucks for Honda may be produced, and that’s under consideration according to the media report. Is this true? If it were true, where is the what is the progress of the discussion with Honda, which you can disclose as of today? That’s my first question. And the second question, with Honda, in collaboration with Honda, commoditization of software is being considered.

That’s what the media reported. If you do so, Asimo OS will be adopted by Nissan eventually. Is there anything that you can disclose as of today?

Ivan Espinosa, Chief Executive Officer, Nissan: Thank you. I think I think you you said it. This is a media report, so we have not confirmed any of this. What I can tell you is that we are actively working with Honda on several projects around vehicle collaboration and also around intelligent car technology, domains of software and domains of autonomous drive technology. This is what we are working and discussing with them.

But we have nothing to announce or confirm at the moment. Thank you for the question.

Jeremy Papin, Chief Financial Officer, Nissan: Please?

Ivan Espinosa, Chief Executive Officer, Nissan: I

Journalist, Various (Nikkei, NHK, etc.): am Yoshizawa, a journalist. Obama plant, people are asking when how you are going to use the land lot, and you are talking to several potential partners. There’s nothing that you can disclose. Can you disclose whether there was a progress in the discussion? And was there any prioritization in the way you reuse the land?

Is there any update about the Opama plant reuse?

Ivan Espinosa, Chief Executive Officer, Nissan: For the question, at the moment, what we have decided is that we will stop the vehicle plant. So this is a confirmed decision, and there is no visibility of having anything related to vehicle production at the moment. So the visibility of any partnership or anything is very low. So we are not confirming anything on this. What I can tell you is that we will be discussing potential utilizations in the future, including of course, the community.

Because we would like to continue adding value to that community by utilizing the land and the location that we have for something that is contributing to society and as a responsible corporate citizen. So this is what Nissan will be doing. And we are again, for the moment, we are focused on the employees. We are focused on the transition. We are focused on alleviating the anxiety, having clarity on what the options for them will be.

And at the second step, we will start seeing how we’d repurpose the land. For the moment, the priority is the employees. Thank you. Thank you for your question.

Journalist, Various (Nikkei, NHK, etc.): TV Next. Asahi, my name is Matsuoka. Thank you for the opportunity. I have two questions. The first one, compared to the initial expectation, the results are better, but operating loss was generated in Q1.

And how do you assess it? What’s your take? And for tariff exposure, JPY $450,000,000,000 will come down to JPY 300,000,000,000. Compared to initial expectation, it’s better? How do you assess this?

What’s your thinking?

Jeremy Papin, Chief Financial Officer, Nissan: So on the I mean, obviously, the Q1 results are weak and just are further stressing the importance of the renaissance plan. We and the need to address the cost competitiveness and to resume the growth of the business. So I think we take them as the situation that we have to deal with further exacerbated by the size of the tariff headwind. And it just highlights the fact that we need to be decisive and speedy decisions that can turn around the business and build a sustainable growing platform. On tariffs, yes, the exposure is lower.

It obviously tariff rules, regulation have been evolving and that’s been driving some of the decline. We’ve also made adjustments to our car flow. We’ve made some adjustments to where production are or parts are imported from. And this is why we can confidently say that the worst exposure or the worst level of exposure should be EUR 300,000,000,000 now.

Lavanya, Moderator/Host, Nissan: You. Anyone, please to the gentleman.

Journalist, Various (Nikkei, NHK, etc.): TV Tokyo, my name is Abe Espinosa san. I have two questions for you. The first question, the other day, between Japan and USA US, they agreed on the tariff. Based on this agreement, from the August 1, 15% will be imposed. With regards to the contents of agreement, what’s your assessment?

What’s your take? This is my first question. What’s your reaction to the agreement between the two countries?

Ivan Espinosa, Chief Executive Officer, Nissan: That is helping. But, again, as we said, still the the start the starting date is not clear. You said it’s August 1, but it’s still something that is not confirmed. So we are observing this very closely. And of course, it’s something that we welcome because it’s alleviating the situation.

And we continue monitoring this and adapting ourselves to the environment as we go forward. The good thing is we have flexibility of production, as you know. So we have one of our core products that is produced in Kyushu and at the same time in Smyrna. So we have this flexibility that allows the business to balance a smart way. And this is what we will be doing moving forward.

What we do expect is to have some news in the future also about the tariff with Mexico because as you know, we have also a significant volume coming in from Mexico, and we are expecting something to come hopefully in the coming weeks. So this is what I can tell you about our view on the tariff situation. Thank you.

Journalist, Various (Nikkei, NHK, etc.): I’m assuming Second question. Yes. Second question. May I? Okay.

Second question, funding. I have a question about funding. $860,000,000,000 yen has been issued for the bonds. On this point, you said that there was the demand for investors. The investors has an appetite.

But after you announced the share price came down, more than 8% of high yields are seen in some cases. So there may be a financial risk here. This decision making process and evaluation, how do you see this?

Jeremy Papin, Chief Financial Officer, Nissan: So on funding, I think the funding was a significant testimony of some confidence that the capital markets have in the ability for the company to be turned around. The share price impact you’re referring to I think is driven by the fact we were issuing shares alongside the convertible. And so the market share price was adjusting for that increase in the number of shares. I think adjusted for that the market cap is actually higher than it was before on a fully diluted basis. In terms of funding costs, what I would say is that the base interest rates across Europe and The U.

S. Have obviously changed over the past several years. When we look at the Nissan spreads, they were at the same level as what we paid back in 2020. And the net interest cost that we are planning to face with this emission is to pay an average 3.5% when swapped in yen. So I think it’s a very acceptable level of cost for the size of the funding that we have to exercise.

Lavanya, Moderator/Host, Nissan: I have time for only one question. So let me take Emory because Emory’s I saw him going up. Yes. Second row, first person. Yes.

He was the first person.

Journalist, Various (Toyo Ke, New Media): New Media newspaper. My name is Muko Yamah. In China, sales are coming down, but N7 has been quite popular. And Mr. Espinosa, how do you evaluate the model N7?

And you said that there’s a possibility of exporting vehicles from China and that preparations are underway. Can you give us the timeline and the size of that kind of export to the extent possible? Can you share more information? Thank you.

Ivan Espinosa, Chief Executive Officer, Nissan: Thank you for the question. Yes, the N7 is coming is a very popular car. Reason for this is a car that it planned with the customer at the center. And successful cars usually are successful when you do that. And we achieved that by utilizing the twenty three years experience we have with our partner there.

As you know, we have the technical center, Dongfeng Nissan, and we developed the car together with a Chinese customer in mind and leveraging on the assets and the experience that we have there. So we were able of developing this car with China speed, China technology and China cost. And this is what’s making these cars successful, yes? And the launch was also very well done by the team in China. It gave us confidence that our brand still has some strength in the market.

And it’s proof that when you make a good car, then you can really still hit strong with the Nissan brand. And China, as you know, is one of the toughest markets in the world. And this is giving us confidence that our brand is still strong. And when we make good cars, which is what we know how to do, we can still progress forward. And this is what we’re going to do not only in China, but in Japan and outside of Japan as well in the rest of the world.

So this is what we’re set to do with the new products that are coming. As for the schedule, yes, we are nothing we have nothing to share today on the schedule, but we are progressing quickly to bring this car to selected markets around the world. Again, no detail to be shared today. But we want to leverage on these values that we have in China of speed, of technology and of cost to bring this product and some other products that are being prepared to some selected markets outside of China. We will share more detail when we are ready.

Thank you. Thank you for the question.

Lavanya, Moderator/Host, Nissan: I think I can take one quick question maybe from NHK. Yes, please.

Journalist, Various (Nikkei, NHK, etc.): Yes, thank you for the presentation. U. S. Tariffs is what I would like to ask about. In Kyushu plant, you are building cars for U.

S, which is SUV, and you are adjusting the production volume at Kyushu for this car. Now tariffs is agreed on 15%. The is there any impact on the production plan in Japan? In relation to this in relation earlier, Espinosa san agreement on 1515% is what you welcome, but 15% is not small, is it, in terms of absolute terms? Will this impact the pricing?

Or how are you going to approach the pricing strategy in that Thank you.

Ivan Espinosa, Chief Executive Officer, Nissan: For the question, as you said, 15% is still 15%. So we welcome the improvement, but 15% is still a challenging number. And this is why we need to continue our efforts of improving costs and improving or reducing our exposure to tariffs as much as we can, both by looking at component improvement in terms of tariff as well as pricing, as you said. We are monitoring very closely the market pricing, and we will follow whenever we have opportunity. As for production, we will as I said, one of the beauties that we have is that we have the production in both sides.

We have this flexibility, and we will continue monitoring how the market is evolving and adjust to optimize the profitability that we can drive with the combination of the two production sites. The good thing also is that Rogue is also having out of the vehicles that are improving in terms of retail sales. Rogue is also one of the products that is benefiting from this and is a product that, as you know, is very important for us in the lineup, and we will continue pushing these vehicles forward with a good balance of pricing, a good balance of customer offer and taking a good close look at the inventory that we are carrying. Our inventories are also improving a lot, by the way. We have managed to adjust to be only around sixty six days, sorry, six days above the industry average at the June, which is a very strong improvement versus where we were at the beginning of the year, and we’re managing that with a lot of discipline.

Yes, thank you. Thank you for the question.

Lavanya, Moderator/Host, Nissan: Thank you. We are just about time, and this will be our last question. Once again, thank you for joining us. If you have any further questions, our communications team is always there to support. Thank you.

Have a good day.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.