After Nissan NEXT, a 4-year transformation plan announced in 2020, the Japanese carmaker has commence with The Arc, its new business plan to drive value and strengthen competitiveness. The plan is focused on a broad-based product offensive, increased electrification, new approaches to engineering and manufacturing, the adoption of new technologies, and the use of strategic partnerships to increase global unit sales and improve profitability.
The Arc is positioned as a bridge between Nissan NEXT which concludes on March 31 2024, and Nissan Ambition 2030, the company’s long-term vision. The new plan is split into mid-term imperatives for fiscal years 2024 through 2026, and mid-long-term actions to be carried out through 2030.
Path to the future
Explaining the new plan, Nissan President & CEO, Makoto Uchida said: “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.”
During the 2-part plan, Nissan will first take actions to ensure volume growth through a tailored regional strategy and prepare for an accelerated transition to EVs, supported by a balanced electrified/ICE product portfolio, volume growth in major markets and financial discipline.
Through these initiatives, the carmaker aims to lift annual sales by 1 million units and increase its operating profit margin to more than 6%, both by the end of fiscal year 2026. This will pave the way for the second part of the plan aimed to enable the EV transition and realize long-term profitable growth, supported by smart partnerships, enhanced EV competitiveness, differentiated innovations and new revenue streams. By fiscal year 2030, Nissan sees a revenue potential of 2.5 trillion yen from new business opportunities.
Balanced product portfolio
Like any carmaker, new products will be vital to meeting annual volume targets over the long term. In this connection, Nissan plans to launch 30 new models over the next 3 years, of which 16 will be electrified, and 14 will be models with combustion engines.
Continuing to offer new models with combustion engines reflects Nissan’s understanding that the customer needs will be diversified as the pace of electrification varies from market to market.
As more people switch to EVs, the Nissan model mix of electrified vehicles is expected to account for 40% globally by fiscal year 2026 and rise to 60% by the end of the decade.
Increases in sales in regions
Nissan’s business world is divided into 8 regions – the Americas (primarily North America), China, Japan, Africa, Middle East, India, Europe and Oceania. To achieve the 1 million-unit target, the Americas are expected to increase sales by 330,000 units by FY 2026 (compared to FY 2023) while China is expected to raise its volume by 200,000 units, with another 100,000 units being exported.
In its home market, the Arc see Nissan will refresh 80% of passenger model line-up, launching 5 all-new models and achieve a 70% electrified level in the passenger vehicle line-up. Sales are expected to be increased by 90,000 units (compared to FY 2023) to 600,000 units in FY 2026.
New models will be launched for the Africa, Middle East, India, Europe and Oceania markets and for Malaysia, which would be in the Oceania region, Nissan intends to launch a 1-ton pick-up truck (possibly a replacement for the Navara) and introduce a C-segment crossover EV, likely to be made in Thailand which Japanese carmakers consider the EV hub for ASEAN.
EV competitiveness
Although not giving up development of combustion engine models, Nissan’s product offensive will see new development and manufacturing approaches aimed to make EVs more affordable and increase profitability. By developing EVs in ‘families’, integrating powertrains, utilizing next-generation modular manufacturing, group sourcing, and battery innovations, Nissan aims to reduce the cost of next-generation EVs by 30% (when compared to the current Ariya crossover) and achieve cost-similarity between EVs and combustion models by the end of the decade.
Reducing EV production costs
In the area of family development alone, the cost of subsequent vehicles – those developed based on the main vehicle in the family – can be reduced by 50%; the variation of trim parts reduced by 70%; and development lead time shortened by four months. By adopting modular manufacturing (which is not new to the industry), the vehicle production line will be shortened, reducing the production time per vehicle by 20%.
Under the Arc plan, more plants in Japan and overseas will adopt the Nissan Intelligent Factory concept, with the Oppama and Nissan Motor Kyushu plants in Japan, the Sunderland Plant in the UK and Canton and Smyrna plants in the USA starting the adoption from FY 2026 through 2030.
Variety of battery packs
Nissan will offer enhanced NCM li-ion, LFP and all solid-state batteries to provide diversified EVs to meet different customer needs. The different types of batteries have different costs and performance so customers can benefit from lower pricing for models like minivehicles. For example, LFP batteries, to be developed and produced in Japan, will be launched that will reduce cost by 30%.
To know more about Nissan products and services in Malaysia, visit www.nissan.com.my.