Nissan’s financial recovery is facing another difficult test after the Japanese automaker reported a staggering 96% collapse in quarterly operating profit while lowering its global vehicle sales forecast for the second time in just a few months. The results, announced on November 11, 2026, highlight the growing challenges facing one of Japan’s most recognizable automotive brands.
Despite stronger sales in the United States and Japan, Nissan continues to struggle with declining demand in China, rising costs, and fierce competition from electric vehicle manufacturers. Chief Executive Ivan Espinosa is pushing ahead with an ambitious restructuring program, but the latest figures demonstrate how difficult the turnaround remains. With another year of financial uncertainty unfolding, Nissan must balance aggressive cost reductions with the need to develop vehicles that can compete in a rapidly changing global market.
Quarterly Operating Profit Nearly Disappears
Nissan’s operating profit for the July-to-September 2026 quarter dropped to just ¥2.1 billion, approximately US$13.2 million, compared with ¥51.5 billion during the same period a year earlier. That represents a decline of 95.9%, effectively wiping out nearly all the company’s quarterly operating earnings. The result was also dramatically below market expectations. A Reuters report cited an LSEG survey of eight analysts who had anticipated operating profit of approximately ¥60.1 billion. The enormous difference between expectations and actual performance demonstrates the unpredictable nature of Nissan’s recovery.
The figures become even more concerning when viewed alongside Nissan’s overall financial performance. Although operating profit remained narrowly positive, the automaker recorded a quarterly net loss of ¥43.5 billion, compared with a ¥106.2 billion loss a year earlier. These measures describe different aspects of the business: operating profit reflects earnings from core operations, while net income includes additional financial and restructuring-related items. The narrowing net loss offers some encouragement, but the collapse in operating earnings shows how limited Nissan’s room for unexpected setbacks has become.
Nissan Cuts Its Global Sales Forecast for the Second Time
Nissan has lowered its global vehicle sales forecast for the fiscal year ending March 31, 2027, to between 2.97 million and 3 million vehicles. This represents another substantial reduction from the previous forecast of 3.15 million vehicles. The company had already lowered that projection in August, when it revised its original estimate of 3.3 million units. Taken together, the two reductions mean Nissan now expects to sell approximately 300,000 to 330,000 fewer vehicles than initially projected. The repeated revisions suggest that weakening demand has been more persistent than management anticipated.
The latest forecast also raises questions about whether Nissan can achieve its financial objectives while selling substantially fewer vehicles. During the first six months of the fiscal year, global retail sales declined 4.7% to approximately 1.41 million units, compared with 1.48 million a year earlier. Second-quarter deliveries were even weaker, falling 8.3% to approximately 709,000 vehicles. While increasing revenue per vehicle and reducing costs can help offset declining volume, those strategies become more difficult when factories, suppliers, and dealerships are operating with less predictable demand.
China Becomes Nissan’s Biggest Challenge
China has emerged as the most significant obstacle to Nissan’s recovery, with vehicle sales deteriorating much faster than the company expected. During the first half of fiscal 2026, Nissan recorded approximately 237,000 retail sales in China, down 15% from the comparable period. The July-to-September quarter was especially troubling, with sales falling 32.1% to approximately 107,000 vehicles. Nissan’s estimates also indicate that China’s broader automotive market contracted by roughly 22% during the first half. These figures show that the company is confronting both weaker industry demand and an increasingly difficult competitive environment.
The rapid movement toward electric and plug-in hybrid vehicles has made the situation particularly challenging for established international manufacturers. Chinese competitors are introducing technologically advanced models at aggressive prices, forcing Nissan to reconsider its product strategy. In August, Nissan had forecast approximately 580,000 Chinese vehicle sales for the year. Its latest outlook has fallen to between 370,000 and 400,000 units. In response, the automaker is adjusting gasoline-powered vehicle production, reducing dealer inventories, accelerating development of its N-series electrified vehicles, and expanding exports. The challenge is no longer simply protecting existing sales but rebuilding Nissan’s competitiveness in a market that is changing rapidly.
U.S. Sales Provide a Rare Bright Spot
While Nissan struggles in China, its American business is showing signs of improvement. During the first half of fiscal 2026, U.S. vehicle sales reached approximately 469,000 units, representing a 5.5% increase from the previous year. The improvement was particularly encouraging because overall American automotive demand was relatively flat during the period, according to Nissan’s management. Several important models performed well, including the Rogue SUV, whose sales increased 31%, the Frontier pickup, which grew 36%, and the Pathfinder SUV, which recorded a 12% increase. These vehicles have become essential contributors to Nissan’s regional recovery.
The company credits its strategy of manufacturing vehicles in the United States for American customers as an important factor behind the improvement. Local production can reduce exposure to certain import tariffs, while a stronger lineup of popular SUVs and trucks helps attract customers seeking practicality and value. Nissan has also focused on disciplined pricing and selling higher-trim vehicles, which can generate better revenue per sale. However, the American improvement has not been sufficient to overcome weakness elsewhere. North American sales, including Canada and Mexico, increased by a more modest 2.1%, emphasizing that Nissan’s regional performance remains uneven.
Japan’s New Models Are Rebuilding Customer Confidence
Nissan’s domestic market has also shown encouraging signs, providing another source of stability during a difficult financial period. Vehicle sales in Japan reached approximately 197,000 units during the first half of fiscal 2026, an increase of 6.3% compared with the previous year. Second-quarter sales improved by 10.7%, suggesting that momentum strengthened as the year progressed. Much of this improvement reflects renewed customer interest in Nissan’s latest vehicles, particularly the Elgrand minivan and Kicks crossover, both important products for the company’s efforts to rebuild its reputation and strengthen its domestic position.
Customer orders provide another indication that Nissan’s product strategy is gaining traction. By the end of October, the automaker had received approximately 11,000 orders for the new Elgrand and 20,000 for the new Kicks. Nissan also reported stronger demand for higher trim levels, an encouraging development because better-equipped vehicles can improve profitability. The Elgrand and LEAF received recognition from the Japan Automotive Hall of Fame, adding another positive signal for the brand. While Japan represents only part of Nissan’s global business, its improving performance demonstrates that fresh products and effective marketing can still attract buyers when the company delivers vehicles that meet local expectations.
Revenue Is Rising Even as Profitability Remains Fragile
One of the most striking aspects of Nissan’s financial results is that revenue has continued increasing despite falling vehicle sales and weak quarterly operating earnings. During the July-to-September quarter, consolidated revenue rose 8.2% to approximately ¥3.11 trillion. For the first six months of the fiscal year, revenue increased 8.8% to ¥6.07 trillion. Nissan attributed much of the first-half improvement to favourable currency movements, with additional support from pricing and the types of vehicles sold. These results demonstrate that declining deliveries do not necessarily translate into declining revenue when manufacturers successfully adjust their pricing and product mix.
The broader six-month earnings figures also reveal progress that the latest quarterly collapse might otherwise obscure. Nissan reported first-half operating profit of ¥80 billion, compared with an operating loss of ¥27.7 billion during the same period last year. Its first-half net loss narrowed substantially to ¥39.7 billion from ¥221.9 billion. However, the operating profit margin was only 1.3%, leaving relatively little protection against further cost increases. The contrast between improving first-half financial results and a weak second quarter highlights the uneven nature of Nissan’s turnaround. Revenue growth matters, but consistent profitability remains the more important measure of lasting recovery.
U.S. Emissions Changes and Earthquake Disruptions Hurt Earnings
The dramatic reduction in quarterly operating profit does not mean Nissan’s underlying business suddenly lost 96% of its earnings potential. An important factor was the absence of a financial benefit recorded during the comparable quarter in 2025. According to Chief Financial Officer George Leondis, changes to U.S. federal emissions and fuel-economy regulations had previously allowed Nissan to reverse certain accounting provisions. That adjustment provided approximately ¥36 billion in operating profit benefits during the earlier quarter. Because the benefit did not recur in 2026, Nissan faced a particularly difficult year-over-year comparison.
Production interruptions added further pressure. An earthquake affecting the Kumamoto region in southern Japan disrupted Nissan’s operations in Kyushu, resulting in several lost production days and thousands of vehicles that could not be manufactured as scheduled. Management also identified delayed recognition of manufacturing cost savings and tax settlements related to previous years. Together, these factors reduced second-quarter operating profit by approximately ¥30 billion, according to Nissan’s estimates. The company believes some of the affected production and cost-saving benefits can be recovered during the remainder of the fiscal year, although the timing and ultimate financial impact remain uncertain.
Rising Raw Material Costs Create Another Financial Challenge
Beyond sales weakness and temporary disruptions, Nissan is confronting substantial increases in the cost of producing vehicles. During the first half of fiscal 2026, higher raw material prices had a negative ¥69.9 billion impact on operating profit compared with the previous year. Aluminum and copper were among the most significant contributors, according to the company’s financial presentation. These materials are essential for vehicle manufacturing, including electrical systems, body structures, and numerous mechanical components. When their prices increase rapidly, manufacturers face pressure to absorb the costs or recover them through higher vehicle prices.
Geopolitical instability has created additional problems for Nissan’s supply chain. Disruptions connected to the Middle East have raised logistics expenses and complicated international shipments, adding to the difficulties facing manufacturers with operations across several continents. Nissan has responded through tighter cost management, adjustments to material specifications where practical, and selective pricing increases. However, management acknowledged that raw material markets remain volatile. For customers, these pressures help explain why manufacturers may struggle to reduce vehicle prices even when demand weakens. For Nissan, controlling production expenses without compromising vehicle quality or competitiveness will remain essential to improving its financial performance.
Nissan Restructuring Delivers Major Cost Savings
Nissan’s ambitious restructuring program, known as Re:Nissan, is beginning to produce measurable financial benefits. The company reported ¥110 billion in additional cost savings during the first half of fiscal 2026, bringing cumulative savings from the program to approximately ¥365 billion. Management is working toward a ¥500 billion reduction in fixed and variable costs compared with fiscal 2024 levels. These improvements involve more efficient manufacturing, reduced engineering expenses, closer cooperation with suppliers, and tighter management of corporate spending. The objective is to make Nissan less dependent on high vehicle sales volumes to generate sustainable profits.
However, the restructuring comes with significant consequences for workers and communities connected to the automaker. Nissan’s broader recovery plan targets a global workforce reduction of approximately 20,000 positions between fiscal 2024 and fiscal 2027. It also calls for reducing the number of vehicle manufacturing plants from 17 to 10 by fiscal 2027. These are restructuring targets rather than measures that have all been completed. Although factory consolidation can improve efficiency and reduce unused production capacity, it can also create uncertainty for employees, suppliers, and local economies. Nissan must demonstrate that a smaller manufacturing footprint can support a competitive vehicle lineup without sacrificing the investment needed for future growth.
New Hybrid and Electric Vehicles Carry Nissan’s Recovery Hopes
Cost reductions alone cannot restore Nissan’s position in the global automotive industry. The company also needs vehicles that customers actively want to purchase. Nissan is relying on a series of new models and electrified powertrains to strengthen demand during the second half of fiscal 2026. In the United States, the Rogue Hybrid with e-POWER technology represents an important expansion into the hybrid SUV market. Japan is benefiting from the Elgrand and Kicks, while Mexico is receiving the Frontier Pro plug-in hybrid pickup. In Europe, Nissan is expanding its electric vehicle portfolio with the compact Pixo, alongside preparations for additional electrified models.
The product strategy reflects Nissan’s need to respond differently across major markets. In China, where electric and plug-in hybrid vehicles are gaining importance, the automaker is expanding its locally developed electrified lineup while exploring additional export opportunities. In North America, gasoline-powered SUVs and trucks remain important sources of revenue, but hybrids offer another way to attract buyers seeking improved efficiency. Nissan is also preparing additional vehicle introductions, including the Skyline and Patrol in Japan and the Juke EV in Europe. Their commercial success will depend on competitive pricing, technology, reliability, and availability. For Nissan, fresh vehicles are essential because the long-term recovery cannot depend entirely on cutting expenses.
Nissan Maintains Its Full-Year Profit Target Despite Growing Risks
Despite the disappointing quarterly figures, Nissan has maintained its financial forecast for the fiscal year ending March 31, 2027. The automaker continues to project approximately ¥13 trillion in revenue, ¥200 billion in operating profit, and ¥20 billion in net income. Achieving those targets will require a significant improvement during the remaining six months. Nissan expects to generate ¥120 billion in operating profit during the second half, compared with ¥80 billion in the first half. The challenge is particularly demanding because the earlier results included approximately ¥60 billion in one-time benefits associated with U.S. tariffs that management does not expect to repeat.
Nissan remains confident that stronger sales in the United States and Japan, improved vehicle profitability, and further restructuring savings can support its recovery. The company reported approximately ¥800 billion in automotive net cash and ¥2.2 trillion in cash and cash equivalents at the end of September, providing financial resources to continue operations and product development. Management aims to finish the fiscal year with automotive net cash exceeding ¥1 trillion. A new business plan is scheduled for February 2027, offering another opportunity to explain how Nissan intends to achieve sustainable growth. For investors, employees, dealers, and customers worldwide, the central question remains whether Nissan can transform its improving cost structure into consistently stronger profits before competitive pressures intensify further.
