On November 6, Nissan released its half-year loss report, and the matter surrounding the sale of its headquarters building was finally settled.
Nissan announced the sale of its global headquarters building and land in Yokohama, Japan, for 97 billion yen (approximately 4.5 billion yuan). The buyer is a consortium formed by Chinese company Minth Group and US private equity firm KKR. The sale agreement will be signed next month, after which Nissan will continue to use the building as its headquarters for 20 years on a lease basis; the rent was not disclosed.
Nissan sells properties to recoup cash.
In fact, Nissan's Yokohama headquarters building had been on the market for months, and now it has finally found a buyer. The price is close to the previously predicted 100 billion yen. Nissan will record a 73.9 billion yen profit from the sale as a special profit in its fiscal year 2025 report. The proceeds will be used for business digitization and R&D, among other things. Nissan stated that this arrangement will not affect its daily operations.
This transaction vividly illustrates Nissan's serious crisis. Financial results released on the same day showed that in the first half of fiscal year 2025 (April-September 2025), Nissan's revenue was 5,578.7 billion yen, a year-on-year decrease of 6.8%; operating loss was 27.7 billion yen, compared to an operating profit of 32.9 billion yen in the same period last year; net loss was 221.9 billion yen, compared to a net profit of 19.2 billion yen in the same period last year. It is understood that during the reporting period, in addition to the impact of exchange rate fluctuations, US tariffs reduced Nissan's operating profit by 149.7 billion yen (approximately 6.9 billion yuan).
For Ivan Espinosa, the newly appointed president and CEO who took office in April, the pressure he faces is immense. Of course, Nissan's predicament was already evident before the change of leadership. Data shows that in fiscal year 2024 (April 2024 - March 2025), Nissan suffered a net loss of 670.9 billion yen. Global sales continued to slump, with the performance in the Chinese market being particularly dire. In 2024 (calendar year), Nissan's sales in China fell to 696,000 units, a year-on-year decline of 12.2%, and a reduction of half compared to 1.381 million units in 2021.
In the first half of fiscal year 2025, Nissan's global sales reached 1.48 million vehicles, a 7.3% year-on-year decrease. Regionally, sales declined in major markets such as China, Japan, and Europe, with the exception of a slight increase in the North American market.
Nissan's new CEO's high-stakes gamble
Of course, selling properties to save itself is only a temporary measure. Espinosa's "Re:Nissan" recovery plan launched in May this year is the real "radical cure," with reform efforts comparable to the "Nissan Revival Plan" led by former Nissan CEO Carlos Ghosn in 1999.
Cost reduction is a top priority in Espinosa's plans. This includes consolidating Nissan's global vehicle assembly plants from 17 to 10 by fiscal year 2027, with reductions also expected at plants in Japan. Recently, the Oihama plant in Yokosuka, Kanagawa Prefecture, confirmed it will cease vehicle production, while the Shonan plant will no longer handle vehicle manufacturing, instead focusing on auto parts production. Nissan had also previously abandoned plans to build a next-generation automotive battery plant in Kitakyushu, Japan.
By reducing its factories, Nissan plans to cut its global annual production capacity from 3.5 million vehicles to 2.5 million vehicles, while also laying off 20,000 employees, representing 15% of its total workforce. This scale far exceeds the layoffs during Ghosn's reforms more than 20 years ago, demonstrating the depth of the crisis. By cutting costs across the entire supply chain from procurement and production to sales, Nissan aims to achieve annual cost reductions of 500 billion yen by fiscal year 2026, as well as positive operating profit and free cash flow in its automotive business.
Of course, the road to reform is fraught with difficulties, and the layoff plan has sparked strong opposition from Japanese labor unions. The challenges at the market level are even more severe. In the field of electrification, although Nissan has early models such as the Leaf, its progress in electric drive technology and intelligent features has been slow in recent years. In key markets, Nissan has suffered setbacks in the US and Chinese markets, resulting in a squeeze on its market share.
Espinosa's situation is even more difficult than Ghosn's was back then. During Ghosn's era, Nissan still had the advantage of globalization, but now the global auto market has entered a phase of fierce competition for existing market share. Nissan's brand power is also weakening, its stock price is declining, and dividend payments have been suspended.
At the end of October this year, Nissan announced that it expects to record an operating loss of 275 billion yen in fiscal year 2025, while the net profit forecast is uncertain. Currency fluctuations and tariffs are expected to cause profit losses of 115 billion yen and 275 billion yen respectively. In addition, the debt of its automotive business is expected to climb to 2.1 trillion yen (approximately 97.4 billion yuan).
Today, the headquarters building, now finalized for ownership transfer, not only carries Nissan's brand memory but also bears witness to the struggles of a giant of its time. Whether Nissan can replicate the success of Ghosn's reforms will undoubtedly test the skills of Espinosa, another foreign leader.
(Original title: Nissan's headquarters building has been sold, but the matter is not over yet)
