Besieged car giant Nissan has been dealt another blow with news that it plans to close many showrooms under its luxury arm Infiniti.
Infiniti will wind down a series of stand-alone facilities in the United States and merge with existing Nissan dealerships across the country.
The decision comes after major European investor Renault signaled plans to reduce its stake in the company, with Nissan officials announcing last month that the brand would only last “12 months.” The decision was made in response to what was revealed.
A week later, Nissan’s chief financial officer Stephen Ma became the first victim of the brand’s well-publicized financial troubles.
Infiniti’s move comes amid news that sales across the U.S. have declined more than 50% in five years, according to reports.
The luxury brand serves 197 dealerships across the United States, but each site averages just 24 units sold per month.
According to Infiniti data, the brand sold just 42,567 new cars in the U.S. in the nine months ending in September, down from the 87,934 it sold in the same period in 2019.
Nissan North America’s vice president of dealer network development told Automotive News that Infiniti’s changes were designed to ensure the longevity of the brand.
“Our assessment prioritizes, first and foremost, the health of the retailer and Infinity’s business,” he said.
“Additionally, we considered anticipated sales, cost and availability of automotive real estate, and size of existing facility.”
Infiniti’s woes are just the latest setback for the Japanese giant following news of the Renault leak in November.
Nissan, one of Australia’s best-selling car brands, has just a year left in the business, sources said, as it scrambles to fill the gaping hole in its finances left by Renault’s exit. they claim.
According to reports, Nissan is currently looking for new investors to ensure its survival beyond 2025.
Nissan is seeking stable long-term shareholders, such as banks or insurance groups, to replace part of its stake in Renault, two people familiar with the negotiations said.
“He has 12 to 14 months to live,” said an executive close to Nissan.
Shortly after this news was announced, Mr. Ma’s resignation was reported, and the CFO resigned a few days later on December 3.
Ma’s loss also follows the loss of chief operating officer Ashwani Gupta in 2023 and the sensational arrest of former chief executive Carlos Ghosn in 2018.
Nissan CEO Makoto Uchida also plans to cut his monthly salary by 50% as Nissan Motor Co. continues to move towards strengthening its finances.
The brand is pledging to cut costs, sell assets and prioritize research and development investment.
Mr. Uchida said, “These restructuring measures do not mean that the company will downsize.”
“Nissan will rebuild its business to become leaner and more resilient, and will reorganize its management team so that it can respond quickly and flexibly to changes in the business environment,” he said.
“Our goal is to strengthen the competitiveness of the products that are fundamental to our success and return Nissan to a growth trajectory.
“As a cohesive team, we are committed to working together to ensure the successful implementation of our plan.”
Nissan isn’t alone in the turmoil; several other automakers are also struggling to adapt to the shift to electric vehicles, increased competition and weak customer demand.
Carlos Tavares, CEO of Jeep’s parent company Stellantis, also resigned this month.
Volkswagen is grappling with strikes in Europe as it plans to close plants as its cars transition from gasoline to electricity.
Other major companies, such as Ford and General Motors, have publicly struggled to invest in electric vehicles while trying to maintain production of traditional models.
GM revealed last week that it had taken a shocking $8 billion hit due to lower demand and profitability.
GM’s sales and market share have been steadily declining in China as competition from local automakers intensifies.
The losses include $5 billion in restructuring costs and a $2.7 billion hit to GM’s joint venture with China’s state-owned SAIC Motor Corporation.
