Nissan to cut production capacity by 20% after suffering worst year since 2009

(CNN) — Nissan committed on Thursday to slashing production capacity by 20% and closing a plant in Spain as part of a sweeping overhaul announced after the Japanese carmaker revealed its first annual operating loss in more than a decade.

The company posted an operating loss of 40.5 billion yen ($376 million) for its fiscal year ended in March, compared to an operating profit of 318 billion yen ($2.9 billion) for its previous fiscal year. It was the company’s worst performance since 2009.

More pain could be on the way. Given the uncertainty surrounding the coronavirus pandemic, “it is difficult to reasonably forecast an outlook for fiscal year 2020 at this time,” CEO Makoto Uchida said at an earnings presentation on Thursday.

The announcements come one day after Nissan, Renault and Mitsubishi said they would deepen their alliance. The companies will make fewer models, share production facilities and focus on the existing geographic and technological strengths of each carmaker as they try to slash costs and ride out the coronavirus pandemic.

The world’s biggest carmaking alliance added that it would abandon the growth at all costs strategy pursued by former boss Carlos Ghosn, whose arrest in 2018 on financial misconduct charges threw the group into disarray.Ghosn has denied wrongdoing.

The new strategy boosted Nissan’s stock, which rose more than 8% in Tokyo on Thursday before earnings were released. Shares are down 29% for the year.

Nissan said that it will close its vehicle manufacturing plant in Barcelona as part of the overhaul.

The Spanish government said it “regrets” Nissan’s decision and will try to persuade the company to keep the plant open, the Industry Ministry said in a press release.

Nissan said its car manufacturing plant in Thailand will become its single production base in Southeast Asia, after the company closed its Indonesia plant earlier this year.