Japan Auto Maker Nissan slash non-essential spending

Japan Auto Maker Nissan told its managers to slash non-essential spending as company grapples with slumping car sales and tumbling profits.

Reuters reported the penny-pinching drive is in place for the rest of financial year until end-March.

It will most likely continue into the coming business year

Japan Auto Maker Managers told to put the kibosh on unnecessary travel, sales incentives to conserve every yen.

Meetings that three or four people would once have traveled to attend in person, might now only have one Nissan representative.

While other gatherings and dinners canceled altogether or replaced by video-conferencing.

The extensive spending cuts come in tandem with Nissan’s decision this month to order a two-day furlough for U.S. employees Jan. 2-3.

There is also an effective travel ban for staff in the United States, where sales have been particularly hard hit.

While the Japan auto maker is not facing any cash crunch.

The actions underscore a deepening sense of crisis at Nissan rocked by ouster of scandal-hit leader Carlos Ghosn.

The departure of other top executives and strained relations with alliance partner Renault SA.

In April, it embarked on a wide-ranging turnaround plan to revive sales.

It boost profits but the business outlook has worsened more than anticipated.

In November, it reported 70% slide in second-quarter operating profit and cut its full-year forecast to an 11-year low.

The de facto freeze on non-essential spending is “increasingly a modus operandi at Nissan globally,” a second source said, adding: “The house is not on fire, but there’s something smoldering.”

Earlier, Nissan Motor executive officer and vice-COO Jun Seki  said he had decided to resign just weeks into his new job.

He will likely depart in January after three decades at Nissan, including a stint heading its China business.

Seki’s resignation could further complicate Nissan’s relationship with top shareholder Renault SA.

Seki recently worked in Paris for a year and seen as relatively close to the French automaker.