Nissan Cuts Non-Core Operations to Manage Costs

After selling its stake in Renault Nissan Automotive India Ltd, Nissan Motor India has announced further trim in operations to streamline costs. According to media reports, Nissan is cutting non-core operations at the Renault Nissan Technology & Business Center India, which handles back-office services such as finance, HR, and IT through its Global Business Services and shared service center teams. 

As part of this step, the Japanese automaker is transferring its GBP and shared service center employees to Accenture for IT and IS roles and Genpact for finance and HR. Massimiliano Messina, SVP of Finance and Information Technology for the AMIEO region, communicated to Employees on April 24 that the process is expected to be completed by mid-June. Messina stated that tight cost management and financial discipline are crucial for sustainability as the automaker plans to build a stronger regional future. 

Additionally, the automaker has struck a bulk deal with multi-brand pre-owned car retailers through one of its dealers-Uwe Motors, to offload over half of the 150 X-Trail SUVs imported in July 2024. 

A Gurugram-based retailer, Big Boy Toyz, offers these zero-mileage seven-seater SUVs at about a 40% discount, making the effective price Rs 29,50,000, compared to the current ex-showroom price of Rs 49,92,000. The bulk sale has negatively impacted the business of Nissan India's authorized dealers, as the new Nissan X-Trail price in India starts as low as Rs 35,00,000. 

While corporate deals for slow-selling models are a common business process, a bulk sale within a year of launch is a concern, especially when decisions are made without consulting channel partners. This might be attributed to the Nissan X-Trail's poor performance, which hints at higher pricing and the absence of several key features.