The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

By Katrina Hamlin

HONG KONG, Nov 5 (Reuters Breakingviews) - Nissan Motor 7201.T is at last adopting the mindset of its fiercest competition. The beleaguered Japanese carmaker plans to copy its Chinese rivals by exporting cars from the People's Republic where it is grappling with weak sales and excess capacity. CEO Ivan Espinosa can leverage a storied brand but he faces risks such as cannibalising the $8.5 billion company's existing business elsewhere.

Ahead of quarterly earnings due on Thursday, the Japanese group has warned of a full-year operating loss of 275 billion yen ($1.8 billion), blaming tariffs in the U.S., its largest market. This makes recovering lost ground in China, its second-biggest market, more urgent.

Deliveries in China grew for a fourth consecutive month in September. Nissan has accelerated product development to keep pace with nimble local rivals, Nissan's CFO Jérémie Papin told Breakingviews in a podcast . That's resulting in healthy demand for its new N7 electric sedan. But the group’s China vehicle sales of 335,803 in April to September are less than half the units it shifted in the same six months of 2020. The company's local production capacity stood at around 1 million in February.

The idea of exporting from the country, first floated years ago, is gathering momentum: In August, Chinese regulators approved Nissan's new export-focused joint venture with $10 billion Dongfeng Motor 0489.HK. In theory, it could sell cars made in China at a bigger premium in overseas markets. That would help to boost the company's bottom line.

Espinosa may seem late to the party. After all, China’s exports of cars quintupled between 2018 and 2024. His made-in-China models will compete against Chinese marques like Geely Automobile 0175.HK that are winning at home. But Nissan boasts a mature brand and sales network that gives it an edge against Chinese carmakers, many of which are having to build up those things from scratch.

Another risk is that Nissan may end up competing against itself, unless it pinpoints specific regions where its China-made models won't vie with sales in its existing portfolio. Nissan has yet to confirm which markets it will target but obvious destinations include price sensitive Latin America and Southeast Asia where more affordable models from China may be well received. Some markets, like Vietnam, still offer subsidies for purchasing imported energy vehicles.

Espinosa is recasting China as a potential asset rather than a liability for the company. Investors, who have sold off Nissan’s shares by a quarter this year, will be watching to see if the plan helps or hinders a turnaround.

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CONTEXT NEWS

Nissan Motor expects an operating profit of 50 billion yen in the three months from July to September 2025, an improvement from an earlier forecast for a loss of 100 billion yen, the company said on October 30.

The company expects to book a 275 billion yen annual operating loss for the full year to the end of March 2026.

Nissan Motor will report results for the September quarter on November 6.

(Editing by Una Galani; Production by Aditya Srivastav)

((For previous columns by the author, Reuters customers can click on HAMLIN/katrina.hamlin@thomsonreuters.com; Reuters Messaging: katrina.hamlin.thomsonreuters.com@reuters.net))