Failure of Nissan

As recession getting worse, many companies make less profit than before. Nissan which is one of the biggest car companies in Japan will cut about 20,000 jobs because its sales keep going down. Net loss for the October-December period amounted to 83.2 billion yen ($904 million), compared with net income of 132.2 billion yen in the year-earlier period. Revenue dropped 34% to 1.817 trillion yen. It expects a net annual profit of 160billion yen, down from 484bn yen a year earlier, and well short of its previous 340bn yen forecast. That’s what happening to this company now.
I think reasons why these happen to this company are:
1. Recession comes, people have lower income and they lose confidence.
2. Higher costs, the growth of wages and more expensive materials make costs going up.
3. Competition, demand of the market is going down, but there are still many competitors. The prices of cars are becoming cheaper. So it difficult to cut the price when costs going up.
So I think, reduce the costs is the best way to survive. Cutting jobs is a good idea, but not too much so that can make sure the company have enough productivity to achieve the market. And keep some jobs is also good for society.
Relocation is another idea, now many big companies are changing place of factories. They are more likely to move to developing countries because labour, land and materials are cheaper there.
Maybe they can find out new product. Such as bike, motorcycle.
Here is some news for you to have a look.
http://news.bbc.co.uk/1/hi/business/7701398.stm
http://www.marketwatch.com/news/story/nissan-may-forecast-annual-loss/story.aspx?guid=%7B620762B0-E3C4-4E80-A9A1-365B71372E6C%7D&dist=msr_2