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Fundamental View
AS OF 17 Nov 2025Management expects positive US sales momentum to continue in F2H25. China retail sales showed signs of stabilizing last quarter based on strong demand for the N7 midsize EV sedan, prompting management to raise its full-year China retail sales target to reflect positive retail sales growth in F2H25. Sustained positive retail sales growth in the US and China in the back half of FY25 would increase our confidence in the company’s ability to achieve automotive segment profitability (ex. tariffs) in FY26 considering they are Nissan’s largest markets by volume and have historically been the company’s largest automotive profit contributors.
Business Description
AS OF 17 Nov 2025- Nissan, with headquarters in Yokohama, Japan, is a leading global automotive manufacturer with a market presence in many countries around the globe. The company’s growth investments are focused primarily on Japan, North America, and China, core markets with large profit pools in which Nissan has a meaningful market share. The company’s business in China is conducted through a joint venture with Dongfeng Motor Corporation.
- Nissan’s Sales Financing segment supports the sale of its vehicles by providing financing solutions to its customers and dealers. To enhance their creditworthiness, Nissan maintains keepwell (support) agreements with its wholly owned financial subsidiaries including Nissan Motor Acceptance Corporation (NMAC) in the United States and Nissan Financial Services (NFS) in Japan.
- The Renault-Nissan-Mitsubishi Alliance was established in 1999 to enhance member company scale in product development and raw material purchasing. The alliance includes equity participation, which led to Nissan holding ownership stakes in Renault (15% non-voting) and Mitsubishi (34%) and Renault holding an ownership stake in Nissan (43%). The Alliance’s automobile production volume is the third largest globally behind Toyota and Volkswagen.
Risk & Catalysts
AS OF 17 Nov 2025Nissan anticipated a consolidated operating loss of ¥275 bn in FY25, with an operating margin of -2.4%. Management confirmed the operating loss outlook reflects the full-year tariff cost, which was revised down from ¥300 bn last quarter to ¥275 bn following the reduction in the tariff rate on Japanese vehicles from 25% to 15%, along with adjustments in manufacturing locations and supplier sourcing. Management maintains its target of returning to positive automotive operating profit and free cash flow by FY26, excluding tariffs.
The Re:Nissan plan targets ¥500 bn in cost savings by FY27, evenly split between variable and fixed costs, and includes reducing the number of manufacturing sites and workforce rationalization. The company has generated 4,500 cost savings ideas for a potential impact of ¥200 bn, up from ¥150 bn last quarter and approaching its variable cost reduction target of ¥250 bn. Nissan plans to end production at its sixth of seven plants slated for closure at the end of November 2025. The company aims to exceed ¥150 bn savings by the end of FY25 and surpass ¥250 bn in fixed costs savings (its target) by the end of FY26 (March 2027).
Key Metric
AS OF 17 Nov 2025| JPY bn | FY21 | FY22 | FY23 | FY24 | LTM F2Q25 |
|---|---|---|---|---|---|
| Revenue | 7,393 | 9,573 | 11,524 | 11,371 | 10,957 |
| EBIT | (78) | 218 | 394 | (78) | (274) |
| EBIT Margin | (1%) | 2% | 3% | (1%) | (2%) |
| EBITDA | 211 | 535 | 745 | 286 | 31 |
| EBITDA Margin | 2.9% | 5.6% | 6.5% | 2.5% | 1.1% |
| Total Liquidity | 3,601 | 3,658 | 4,196 | 4,272 | 2,790 |
| Net Debt | (728) | (1,213) | (1,546) | (1,498) | (991) |
| Total Debt | 973 | 687 | 468 | 661 | 1,199 |
| Gross Leverage | n/m | 1.3x | 0.6x | 2.3x | 39.2x |
| Net Leverage | -3.4x | -2.3x | -2.1x | -5.2x | -32.4x |
CreditSight View Comment
AS OF 17 Nov 2025We reiterated our Market perform recommendation on Nissan Motor and Nissan Motor Acceptance Co. (NMAC) notes based on relative value, the company’s weak near-term automotive profit outlook, partially offset by improved retail sales trends and increased visibility into near-term Re: Nissan cost savings initiatives.
Recommendation Reviewed: November 17, 2025
Recommendation Changed: July 16, 2025
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