Nissan has slashed its sales forecasts for China, expecting to sell between 2.97m and 3m cars this year, down from a previous forecast of 3.15m. The Japanese carmaker admitted it was caught out by accelerating electric vehicle sales amid a brutal price war in the world’s biggest automotive market. To respond, the company is cutting back on petrol car manufacturing while increasing production of battery electric vehicles and plug-in hybrids. This strategic pivot aims to address weaker demand and intensifying competition that have left the carmaker’s sales down 32% in the first nine months of the year.
A Harsh Market Reality
Ivan Espinosa, Nissan’s chief executive, stated that "China remains our biggest challenge" because the shift to new energy vehicles is happening faster than expected. He noted that the market is being very harsh, with sales across China falling by 22% in the first half of the year before pressure intensified from July through October. Nissan’s product lineup, led by the Sylphy family of saloon cars, was too heavily associated with petrol engines, prompting the firm to cut local production and export some products. Instead, the company is trying to ramp up its N series of models, which are electric or plug-in hybrids, to compete against a huge number of Chinese rivals chasing a shrinking market.
Divergent Global Strategies
While pushing for increased electric car production in China, Nissan has been among the manufacturers slowing the shift to batteries in Europe. In the UK, the carmaker lobbied to weaken the zero-emission vehicle mandate and continue selling petrol cars after 2035, despite evidence of rising demand for electric vehicles. Data showed that sales of used electric vehicles rose much faster than petrol cars, with retail sales up an eye-popping 56% year on year in October. Ian Plummer, chief customer officer at Autotrader, reported that electric vehicles now account for one in 10 retail sales on the platform. Espinosa expressed hope that products from Sunderland and Japan would be included in proposed "Made in Europe" rules, though current drafts exclude all Nissan cars from EU subsidies, adding significant pressure on the carmaker.
