By Rory Jones and Jason Douglas

OPPAMA, Japan -- The Nissan factory here was synonymous with Japan's postwar industrial rise. Opened in the 1960s, it was one of the first car plants to deploy robotics and the place where Nissan in 2010 began manufacturing the Leaf, its pioneering mass-market electric vehicle.

Over the next two years, Nissan CEO Ivan Espinosa will shut it down, hollowing out a town of about 30,000 people that proudly sent generations of schoolchildren on field trips to the plant.

Bleeding cash and reeling from management missteps, Nissan has arguably the bleakest outlook of any major automaker. Its future as a stand-alone carmaker is now in doubt.

Rescuing Nissan falls to Espinosa, a 46-year-old Mexican and company lifer. He got the call offering him the job on a Friday in March, shortly after Nissan announced a record quarterly loss, blew up a merger deal to be rescued by Honda and ousted its chief executive. Espinosa overcame a pang of apprehension about the size of the task and was announced as the new CEO the following Tuesday, March 11.

His job, he says, is to drive change, "even if some of those changes are a bit painful."

The building where he sat for an interview, Nissan's headquarters in Yokohama, is an example. Nissan -- the ninth-largest car company by sales volume, according to research firm Inovev -- could sell the building to raise cash.

"Simply, Nissan is not making money today," said Takaki Nakanishi, head of Tokyo-based automotive consulting firm Nakanishi Research Institute. "If Nissan fails to turn around its profitability, there is no future."

Auto CEOs in Detroit, Japan and Germany are grappling with the rise of Chinese electric-vehicle makers and the resulting collapse of market share in China, the world's biggest auto market. They have to make huge investments in electrification, artificial intelligence and autonomous driving, without knowing where those technologies are headed.

President Trump's push to return manufacturing to the U.S. via tariffs has added one more challenge for the industry. Though it makes cars in the U.S., Nissan also has exported them to American showrooms from Mexico and Japan. It says tariffs are expected to cost it around $2 billion in lost profit in the fiscal year through March. Nissan's sales volume peaked at 5.8 million cars in its 2017 fiscal year, when it earned 750 billion yen in net profit, equivalent at current rates to $5 billion. But it slumped to a near-record net loss of $4.5 billion last year, and its share price is down 70% since the sales-volume peak.

Other top brands are also feeling the pain. Honda expects net profit to fall by half in the current fiscal year. The share price of Stellantis, the owner of Jeep, has fallen 40% since tariffs were introduced in March. Volkswagen shares are down nearly 10%.

Espinosa's position draws inevitable comparisons to the only other non-Japanese CEO to lead Nissan: Carlos Ghosn, who was also in his mid-40s when he arrived in Japan in 1999 from Renault with a mission to save Nissan, in crisis at the time because of bloated debt and high costs. Ghosn, too, closed factories and slashed jobs, quickly returning the carmaker to profitability.

But the differences with Ghosn are instructive.

Ghosn brought the kind of charisma that inspired a Japanese publisher to create a manga comic book about him. His life has been filled with cinematic scenes -- growing up in Lebanon as the son of a man who spent a decade in prison on a murder charge and turning himself into a richly compensated globe-trotting CEO.

Ghosn's career at Nissan ended when Japanese prosecutors accused him of misrepresenting his pay and stealing from the company. Before he could go on trial, he fled Japan, hidden in a musical-instruments box, to Lebanon, where today he can't leave the country or risk extradition and maintains his innocence.

After the theatrics of Ghosn, Nissan chose a company loyalist in Espinosa whose flashiest gig was serving as a drummer in a band called Tempura Crime Scene.

Espinosa grew up in Mexico City and, as a child, would visit the bus factory where his father worked as a mechanical engineer. He would also join his father in tinkering with cars at home, changing brake pads, spark plugs or the oil.

One day when he was about 15, Espinosa saw a Nissan 300ZX sports car in the street. He remembers rushing to pick up an automotive magazine to read about its horsepower and cockpit-like interior.

After studying engineering, he joined Nissan's Mexico operation in 2003 in product planning. He has been at the carmaker ever since, serving around the globe.

Espinosa's phone lock screen shows a boulder-gray Z sports car, a descendant of the model that caught his eye as a teenager. He often takes the car to work or drives it on a racetrack in the shadow of Mt. Fuji.

"The value of sports cars is not only financial, it's the soul of a company. And especially the Z, it's the soul of Nissan," said Espinosa, who lives in Yokohama with his family.

Espinosa believes Nissan's dire state is rooted in the strategy put in place by Ghosn a decade ago, when he sought to roughly double Nissan's global sales, then around four million cars. The strategy forced Nissan to discount car prices, eroding margins, and eventually left the company with underused factories, he said.

"The speed at which management back then expected to grow was completely irrational," Espinosa said.

A spokesperson for Ghosn said Nissan's current state reflects "shortcomings in management" since he was CEO.

In the U.S., Nissan failed to develop hybrid gas-electric vehicles. Hybrids surged in popularity during the pandemic and proved a windfall for Toyota and Honda.

Nissan's pioneering Leaf EV long ago faded in the shadow of models such as Tesla's that combined a sense of cool with longer range and faster charging. Meanwhile, it got blitzed by local players in China, losing half its sales there in just the last three fiscal years.

Espinosa, the third Nissan CEO to take a stab at undoing Ghosn's legacy, wants to rip off the bandage and get quickly to an annual capacity of 2.5 million cars -- less than half Nissan's sales peak.

He is closing seven of Nissan's 17 factories worldwide and letting go 20,000 employees, or 15% of the total, and he hopes to get back in the black next year.

In the U.S., Espinosa is increasing production at Nissan's two main facilities in Smyrna, Tenn., and Canton, Miss., where it makes the Altima sedan and Rogue and Pathfinder SUVs, replacing imports. Nissan still exports some models from Japan, such as the Rogue, but margins on those are squeezed because of 15% tariffs on Japanese cars, so it is directing marketing dollars to the more profitable U.S.-made models.

A long-running ad campaign involving winners of college football's Heisman Trophy this year features them on a road trip across the U.S. in the Nissan Pathfinder and Rogue as well as the Frontier pickup.

In China, Espinosa plans to beat his rivals by joining them. Nissan's Chinese partners used to follow its design lead, but now Nissan's joint venture with carmaker Dongfeng Motor is producing cars catering to Chinese tastes. Nissan hopes to export its China-grown technology.

"We can actually play a very, very strong role in reshaping not only the future of Nissan, but the future of the industry," Espinosa said.

Even if all those moves work, Japanese officials are worried companies such as Nissan won't have the scale to innovate in areas such as artificial intelligence.

"We still have some strengths to compete," said Masamichi Ito, director of the automotive division at Japan's Ministry of Economy, Trade and Industry. But in next-generation tech, he said, "we have to catch up."

Fearing Nissan was too small and weak to survive on its own, the ministry pushed the aborted Honda-Nissan merger plan. The two carmakers are still collaborating on software research.

Espinosa said the company was still open to a financial partner, but he wants the Nissan brand to endure.

Write to Rory Jones at Rory.Jones@wsj.com and Jason Douglas at jason.douglas@wsj.com

(END) Dow Jones Newswires

September 26, 2025 19:00 ET (23:00 GMT)

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