The Strategist

Renault and Nissan consider cuts of more than $5B

05/25/2020 - 09:23

Renault and Nissan, members of the Renault-Nissan alliance, are getting ready to announce spending cuts of more than $ 5 billion this week, the Wall Street Journal writes, citing sources familiar with the situation.

Rian Castillo
Rian Castillo
Official announcements of companies are expected on Wednesday, Thursday and Friday, the publication added.

According to sources, Nissan plans to cut spending by another $ 3 billion in addition to saving the same amount announced in July 2019. Since the July announcement, Nissan has reduced nearly 15,000 employees, and further staff reductions are planned along with budget cuts in each department, from project to event planning. "The company's new plan also provides for a reduction in production capacity by another million units to what was announced last year, resulting in Nissan's annual production volume of about 5.5 million cars," the sources added.

French automaker Renault, in turn, intends to reduce structural costs by at least €2 billion ($2.2 billion), or 20% over the next three years.

The publication adds that initially the companies together planned to sell about 14 million cars by 2022, and now, as sources added, the target is close to 10 million cars.

Renault S.A. is one of the largest French automotive corporations, part of the Renault-Nissan alliance. Renault owns 43.4% of Nissan.