Nissan is studying the cost competitiveness of Chinese suppliers and exploring how to apply their practices globally, the company said, as it seeks to reduce variable costs by 250 billion yen ($1.71 billion) in a wider efficiency initiative.
Tatsuzo Tomita, Nissan’s chief of total delivered cost transformation, said the automaker is learning from Chinese suppliers’ use of standard parts and close collaboration with designers. “We’ve gained access to Chinese-style ways of working, and my current challenge is figuring out how to apply those methods to parts for our current and upcoming vehicles,” Tomita told reporters at Nissan’s head office in Yokohama on Wednesday.
The cost-cutting measures are part of Nissan’s broader turnaround plan, which includes reducing about 20,000 jobs and consolidating seven plants, aiming for 500 billion yen in total savings by March 2027. Half of the savings are expected from fixed-cost reductions and the remainder from variable costs. The company seeks to secure operating profit and positive free cash flow in its automotive business by the fiscal year ending March 2027.
Tomita emphasized that Nissan is not aiming to shrink its supplier base but to strengthen collaboration. He noted Chinese suppliers are expanding globally with operations in Hungary, Morocco, and Turkey, and Nissan is considering them as potential partners for its international strategy.
While acknowledging the 250 billion yen target is “massive,” Tomita said it could be achievable if the company sustains its current momentum, which has been driven by sourcing thousands of ideas from employees. He added that the effects of the cost-saving measures are likely to materialize more widely by the end of this year or next, varying by vehicle model.
Source: Reuters
