Nissan’s ‘Arc’ business plan aims to boost global sales

With big push on electrification

Nissan Motor Corporation has launched ‘The Arc,’ a forward-looking business plan designed to drive value and bolster the company’s global competitiveness. Made public in Yokohama, Japan, this new strategy aims to bridge the gap between Nissan’s recent transformation efforts and its long-term vision outlined in Ambition 2030.

The plan encompasses many initiatives, including a substantial increase in global sales, an expanded product portfolio, and significant strides in electrification and manufacturing innovations.

Makoto Uchida, Nissan’s President and CEO, stressed the significance of The Arc plan in navigating the company’s future: “The Arc plan shows our path to the future. It illustrates our continuous progression and ability to navigate changing market conditions.

“This plan will enable us to go further and faster in driving value and competitiveness. Faced with extreme market volatility, Nissan is taking decisive actions guided by the new plan to ensure sustainable growth and profitability.”

Aiming for aggressive growth

Nissan’s ambitious targets include a projected increase in global sales by 1 million units compared to the fiscal year 2023. The company aims to achieve this growth while improving its operating profit margin to exceed 6% by the end of fiscal year 2026.

To support these objectives, Nissan plans to introduce 30 new models by the end of fiscal year 2026. Of these, 16 will be electrified, reflecting Nissan’s commitment to enhancing its electrified vehicle lineup.

Strategic product and market focus

The Arc plan outlines a balanced approach to product development and market expansion. Key aspects include:

Americas: Nissan intends to boost sales across the region by 330,000 units and invest $200 million in the U.S. for an integrated customer experience. Seven new models will be launched in the U.S. and Canada, while 78% of Nissan’s passenger vehicle lineup in the U.S. will be refreshed. Additionally, new e-POWER and plug-in hybrid models will be introduced.

China: The company plans to refresh 73% of its Nissan-brand models in China and introduce eight new-energy vehicles (NEVs). The target is to reach one million unit sales by fiscal year 2026 and commence vehicle exports in 2025.

Japan: Eighty per cent of Nissan’s passenger model lineup will be refreshed, with five new models set to debut. Nissan aims to achieve a 70% electrified level in its passenger vehicle lineup and increase sales by 90,000 units to 600,000 units by fiscal year 2026.

Europe, Middle East, India, and Oceania: Sales are expected to increase by 300,000 units across these regions. Specific plans include launching six new European models, achieving a 40% EV passenger-vehicle sales mix, and introducing new models and SUVs in the Middle East, India, and Oceania.

Electrification and manufacturing innovations

A central element of The Arc plan is Nissan’s focus on advancing electrification. The company aims to enhance the competitiveness of its EVs by reducing the cost of next-generation models by 30% compared to the current Ariya crossover. This cost reduction will be achieved through new approaches like group “family” development, modular manufacturing, and advanced battery technologies.

By developing EVs in families, Nissan expects to cut development costs by 50%, reduce part variation by 70%, and shorten lead times by four months. Modular manufacturing is anticipated to decrease production time per vehicle by 20%. The plan also includes a significant shift towards adopting the Nissan Intelligent Factory concept and the EV36Zero production approach at various global plants.

Advancing technology and partnerships

The Arc plan highlights Nissan’s commitment to technological advancements, including next-generation driver-assistance systems and diverse battery options. New enhancements to NCM li-ion and LFP batteries are expected to significantly reduce charging times and costs.

Strategic partnerships will play a crucial role in Nissan’s plan. The company will continue leveraging its alliance with Renault and Mitsubishi Motors while exploring new partnerships in China, Japan, and the US. Furthermore, Nissan aims to develop and source 135 gigawatt hours of battery capacity through these partnerships.

Financial discipline and shareholder returns

Financial discipline is a cornerstone of The Arc plan. Nissan plans to maintain a CAPEX and R&D investment ratio of 7% to 8% of net revenue, excluding battery capacity investments. The company also intends to invest over 400 billion yen in battery capacity and ensure positive free cash flow even with increased electrification investments. Nissan aims for a total shareholder return of more than 30% and to maintain net cash at 1 trillion yen throughout the plan’s duration.

With The Arc, Nissan is setting the stage for a transformative period in its history, focusing on growth, innovation, and a sustainable future in the automotive industry.

Featured image: Makoto Uchida, Nissan President & CEO, introduced The Arc business plan in Yokohama, Japan. Credit: Nissan