Nissan CEO Ivan Espinosa on Re:Nissan: Cost Cuts, a Smaller Footprint, and Competing with China
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Can Nissan recover after its painful restructuring? In this interview with economic journalist Hisao Inoue, Nissan CEO Ivan Espinosa, in the role since April 2025, says the recovery plan is on track and slightly ahead of schedule in places. He also says the company's profitability is still fragile and that market confidence has to be earned. Across the conversation he returns to one idea: Nissan's old pursuit of volume "no matter what" is over. In its place he describes a company with a lower break-even point, simpler manufacturing, and growth built on loyal retail customers. The interviewer's questions are not in the transcript, so this article follows Espinosa's answers and infers the topics from those answers.
Three Pillars of the Recovery Plan
Espinosa organizes the plan around three pillars. The first is cost. Nissan set a target of 500 billion yen in savings, split evenly between fixed-cost and variable-cost measures. At its first-quarter announcement for the current fiscal year, the company reported 315 billion yen already achieved toward that goal. He credits the pace to a "very disciplined system and governance" for tracking progress. He also points to active support from management for the teams doing the work, and to transparency and speed in how management and those teams work together.
The second pillar is go-to-market strategy and product, with the mission to "reignite" the lineup. Nissan is prioritizing three markets for product effort: Japan, the United States, and China. The third pillar is partnerships, covered in more detail below. Overall, Espinosa says the company is on track and "a bit ahead in certain areas," but he adds that many challenges remain.
Japan: Seven New Products in Twelve Months
Espinosa focuses on Japan to illustrate the product pillar. Nissan has announced seven new products for Japan within 12 months. He ties this cadence to a roughly 40% cut in development time. With that speed, he says, the company could give Japan's product schedule more priority.
He calls the early results encouraging. The Kicks has passed 13,000 orders. Another recent model has received more than 9,000 orders in a matter of weeks; its name is garbled in the transcript. He says Japanese customers are "coming back to our showrooms." He is also careful to say much work remains. Nissan has to keep bringing exciting products and invest heavily in communication and in rebuilding trust with Japanese customers.
Partnerships: Old Allies and New Kinds of Partners
On partnerships, Espinosa describes a base of existing alliances with new layers added on top. Nissan continues to work with Mitsubishi Motors on projects such as kei cars, and it has announced collaborations with Mitsubishi for North America and Oceania. Renault, which he calls "one of our strongest partners today," is the source of several products already launched in Europe, with more to come.
New partners take two forms. The first is traditional automakers. He cites the recently announced agreement with Honda to jointly develop software-defined vehicle (SDV) technology. The second is companies outside the auto industry. He names Wayve and Uber as partners for bringing robotaxis and autonomous driving technology into Nissan's lineup.
Why the Share Price Hasn't Followed
Espinosa agrees that the company has not yet earned the market's confidence. He acknowledges that first-quarter net income was positive "but barely positive." The operating margin has to become larger and more stable. He says that will come only from continued cost reduction and a stronger top line. Those would widen the margin, generate more cash, and in turn produce better net income.
He describes external conditions as difficult. China is unstable and total industry volume there has fallen. Nissan has "held our place," but he calls the market complicated. Problems in the Middle East are limiting how much product Nissan can supply to the region, which he describes as "opportunity left on the table." His answer is to keep improving the company's resilience and fundamentals. As Nissan shows better resilience, top-line growth, and the transformation planned in its mid-term plan, he expects confidence to follow and the share price to move.
China: Price War, Inventory, and a Regional Approach
Espinosa says the US and China, the world's two largest markets, are in very different situations. The US remains profitable for many automakers. China does not. Nissan is still making "a bit of profit" there, but the price war is squeezing it more and more.
His response in China starts with a fast shift to new energy vehicles (NEVs). Nissan's main asset there is its installed base: more than 15 million people in China drive Nissans today. The first concrete step was clearing a large inventory of combustion-engine (ICE) vehicles. That freed dealers' finances so they could stock NEVs and start selling them.
The second step is regional marketing and sales. Espinosa explains that a single nationwide commercial policy once worked because the market was fairly homogeneous. Now it is fragmented. Some provinces have high NEV penetration, while others remain more ICE-oriented, because of government incentives, customer tastes, and other factors. Nissan is adjusting both its product mix and its commercial support province by province.
The third step is what he calls the "Lighthouse project," a commercial excellence program. It revisits the basics of how cars are sold, delivered, and supported, from first contact with a customer through delivery and after-sales. It began a few months ago as a pilot in a handful of stores. He says it worked well and that the goal is to expand it to more than 200 shops by the end of the calendar year, and further in early next year. Part of the program is retraining sales staff. He notes that selling a technology-heavy EV is different from selling the conventional ICE cars where Nissan was strong some years ago.
Speed, and Standing Apart from the Crowd
On whether Nissan can win in China, Espinosa says speed is not optional there: "If you don't have speed, you just simply cannot survive." Nissan's latest NEVs in China were developed at "China speed." He cites the N7, which went from development to production in 24 months, as proof that Nissan can match Chinese developers on pace.
For the rest of his answer he emphasizes Nissan's heritage, quality, and dealer network, along with its 15 million existing owners. He also argues Nissan can stand out because Chinese products have become "too homogeneous," to the point that "it's very hard to say which car is which brand." He attributes this to many automakers not understanding customers properly and copying each other. His message to his teams: "stop looking at what others are doing. Let's talk to our customers." He wants to build on the owners who already trust the brand and to bring knowledge and experience from outside China.
How Much to Delegate to the Regions
Espinosa describes a split of responsibilities between headquarters and the regions. Much is delegated, but what he calls "the essence" stays with Nissan as a corporation. That includes brand direction, vehicle concepts, which markets to target and prioritize, lineup composition, and resource allocation. These are decided jointly by central and regional teams under what he calls "very light governance."
Once a vehicle concept is agreed, execution is fully delegated. Regional teams work closely with suppliers and are "really at the gemba," so they can decide and act quickly. He warns that speed without the right strategy is dangerous: "we can be very quick but going in the wrong direction."
The United States: Retail First, Then the Brand
Espinosa describes the US business as doing very well, with consistent month-over-month growth in retail sales. Nissan deliberately told its teams to focus on retail buyers rather than fleet and rental customers. He says retail customers are healthier on margin and loyalty, and they also support sales finance, accessories, and other side businesses. He calls Nissan the fastest-growing brand in US retail sales. The strategy also prioritizes US-built vehicles, to reduce the impact of tariffs and maximize profit.
He sees the brand as the next task. Nissan has had problems with the perceived quality of some products, and some customers' trust weakened. For roughly the past 12 months, communication has centered on trust, reliability, and quality. Once that is established, he wants to present Nissan as progressive and technologically advanced but accessible. In his words, the aim is "excellent technology that makes people's lives better but is also accessible," and he plans to push that message in North America and globally.
Breaking with the Volume-at-Any-Cost Era
When asked how today differs from the past, Espinosa draws a sharp line. Previously there was "a very strong intention to grow volume no matter what," and that is no longer the approach. He says that is why the Re:Nissan plan required a "very hard reset" of the industrial system. For many years, he says, the manufacturing footprint was never adjusted.
He says the break-even point is now much lower than in 2016 or 2017, when Nissan needed high volume just to keep a good operating margin. He is direct about past leadership: "some of the leaders of a company wanted to be number one no matter what," which he calls "not healthy." For him, the real competition is about sustainability: a company that can grow organically and "survive five or 10 years down the road." That means creating value and profit from satisfied customers who buy again and stay in Nissan's ecosystem.
He acknowledges the consequence of the old model. Because the break-even point was high, the factories needed volume and Nissan leaned too much on rental fleets. In some years, 30% to 35% of US volume went to rental companies, which he calls "nothing to be proud about." Reaching "real people" is, in his words, the real challenge ahead.
Filling US Plants: Smyrna, Canton, and Possible Contract Production
On low utilization at US plants, Espinosa outlines product plans for each site. The new Rogue is rolling out and will be built at both Kyushu and Smyrna. At Smyrna, the line building D-segment products is full. The spare capacity is on the line where the Rogue is currently made. He expects the new Rogue to raise volume there. Over time, Nissan plans to add products to Smyrna "in an organic way." Instead of pushing more Rogues into the market, it would add products that attract different customers, including buyers of higher-priced vehicles. He offers Infiniti as "a bit of a hint."
Canton has two lines: a body-on-frame line that currently builds only the Frontier pickup, and a passenger-car line. Nissan has announced that a family of five products on the same frame architecture will be built there. He says planning suggests the frame line's capacity may not be enough. The company is now discussing how to handle the overflow and reorganize the system.
On whether other companies might build vehicles in Nissan's plants, he says nothing concrete can be shared. He prefers to fill US capacity with Nissan products. If that is not enough, he says Nissan will not "do crazy things like we did in the past." Instead, it is open to working with automakers that need capacity. North America as a whole has overcapacity, so he argues this kind of matching is a win-win. Companies needing capacity avoid new investment, and companies with spare capacity fill their plants. Honda is "of course one candidate," he says, but others could be considered.
Preparing for Chinese Competition Outside China
On the broader outlook, Espinosa admits he cannot predict what will happen and says he reads conflicting news every morning. Nissan is focusing on becoming more resilient. Chinese automakers are aggressive at home and are expanding abroad. They are not yet in the US, he notes, but he sees them in Latin America, the Middle East, ASEAN, and Europe. He thinks they could reach the US, so he wants to speed up the transformation of Nissan's supply chain and manufacturing now.
He explains how the "family" approach supports this. At Canton, five vehicles on one architecture will share a high level of commonality. That reduces the number of parts Nissan must engineer and the number suppliers must develop, produce, and ship. He says the whole system becomes more cost-competitive and faster. The same logic underlies the recently announced manufacturing transformation in Japan.
Japan's Production Restructuring: One Family per Line
In the mid-term, Espinosa says the goal is for one vehicle family to run on one line. Today, he says, the same products are built in several parts of the world. That duplicates investment and tooling and leaves suppliers making the same part in three places.
He describes the planned roles of the Japanese plants. Nissan Motor Kyushu will focus on the global B and C families. Nissan Shatai Kyushu will keep building frame-based vehicles and commercial vehicles, which he says it does excellently. Minivans will be consolidated at Tochigi. Tochigi is strong in low-volume, high-quality, high-complexity products and will also handle EVs and serve as a center of excellence for minivans. Each site gets a clear role, and suppliers get clearer expectations: more volume, less complexity, and less variety.
Nissan aims to produce 1 million vehicles a year in Japan, for the domestic market and, more importantly in his view, for export. He says exports provide a hedge. A balance of about 50/50 between domestic sales and exports helps with currency swings. It also helps with market fluctuations: if Japan's market weakens, more can be exported, and if export markets struggle, the company has flexibility. He frames this as part of keeping Japanese monozukuri (manufacturing) sustainable.
How Nissan Got Here
Asked how the situation arose, Espinosa points to an earlier race to become a 10-million-vehicle company. That race came during the excitement about the BRICs (Brazil, Russia, India, and China), when the economy was booming and many companies saw a time to expand. He believes Nissan expanded "without enough control or discipline," and that many of those markets developed differently than expected. Because the industrial system went unadjusted for what he estimates as eight or nine years, the hard reset became necessary last year.
He declines to blame one cause or one set of managers. He says the company tried to continue the same growth approach because it seemed possible. Then conditions changed: China became more complex, COVID hit, and geopolitics made exporting cars much harder than ten years ago. He resists saying simply that management neglected the problem, and attributes the outcome to many changes in the world. The lesson he draws is to return to basics: a sound strategy, an ecosystem in which suppliers and manufacturing can compete, and simple, cost-competitive, attractive products.
Technology, the "Obeya" Approach, and Succession
The final part of the transcript is fragmentary, but several points come through. Espinosa says that in the short term he sees a technology, garbled in the transcript, as a way to position Nissan as "a pioneer of good affordable technology," and that Nissan wants to make it as widespread as possible to strengthen the brand.
He describes the obeya (big room) approach. People from different functions work together to make cars more cost-competitive "without caring about who gets the credit," removing silos and speeding up decisions. He says the organization learned a lot from it and he wants that mindset in "every single corner of the company."
He ends with a personal statement about leadership. Responding to a question whose wording is not in the transcript, he says "I will never be that," and adds that "the company is much more important than any individual." He says his role has an end. Much as he enjoys it, there must be a moment to step down and bring in fresh leaders with a fresh view, and he says the company is preparing for that too.
I think in the measure that we show this resiliency improvement, top-line improvement and the transformation that we are preparing in our midterm plan, I think the confidence from the market will come and we should see movement in our share price.
Back then we needed a lot of volume to actually continue generating a good operating margin. That is no longer the case now. And some of the leaders of a company wanted to be number one no matter what. This is not healthy for me. The competition is sustain and have a company that can grow organically and that can pave the way to survive five or 10 years down the road. Forch.
PBR.
You.
Good morning.
Yeah, we are on track, I would say a little bit ahead of schedule in Nissan. If you take a step back, there were three main pillars in our plan. One was, of course, the cost efforts, which we gave ourselves a target of 500 billion yen, 50% of that coming from fixed costs efforts and 50% of that coming from the variable costs efforts. And in our Q1 announcement of this fiscal year, we explained that we have achieved already 315 billion yen towards that goal. So I think on that area we are going on track and we are moving at a good speed.
We have put in place a very disciplined system and governance to follow this, and we are supporting the teams very actively from the management side. We have a very good collaboration between the management and the teams. Transparency and speed is very good. So this is, I think, the reason why we are moving at a very good pace in this area.
Second one was about go to market and product, and here we gave ourselves a mission to reignite the portfolio of products. We have prioritized certain parts of the world, like Japan. Japan is one very important market for us, the US as well as China. So these were like the three main markets where we focus our product efforts. And we are doing, I believe, good progress.
I will probably center around Japan today. In Japan we have announced that we will be introducing seven new products in the space of 12 months. And this is coming because of the efforts that we have made to reduce the development times that we have in the company. We have reduced that for around 40%. When we gained speed, we were able of prioritizing more the Japan cadence of products, and this is how we agreed to focus in Japan and bring these seven products in 12 months.
And I think the result so far is good. There's still a lot of work to do in Japan. I think we have to continue bringing this excitement, a good product to customers, and work a lot in our communication and building trust with the Japanese customers. But the results, I would say, last two or three products are very encouraging. So Kicks and Elgrand are performing very well. We have received more than 9,000 orders for Elgrand in a matter of weeks, and also Kicks is now above 13,000 orders. So it's very good. It's very encouraging, and we are very grateful to the Japanese customers because they are coming back to our showrooms and the performance is gaining speed. So this is what relates to the second pillar, which is go to market and product.
And then the third part of the plan is about partnerships, and in partnerships we have also done good progress. First, the foundation continues, which is we continue working with Mitsubishi Motors on many successful projects that we have, like kei cars. We also announced some collaborations for the North American market and also Oceania. We also continue working with Renault, which is one of our strongest partners today. We have announced several products that we have already introduced in Europe, and we will be introducing more.
And then on top of that we're building new partners, and these new partners come in a couple of shapes. One is the traditional OEMs. So recently we announced this agreement with Honda to develop jointly SDV, software-defined vehicle technology. And also we have worked a lot with partners outside of the auto industry, like Wayve and Uber, to bring robotaxis and autonomous drive technology to our products and our lineup. So this is, in all, I think, the summary of where we are. We are, I would say, on track, a bit ahead in certain areas, but there's a lot of challenges still ahead of us in Nissan. A lot more work to be done.
Yeah, I think as you said there's still a lot of work to be done. There's several elements that we have to reinforce. One is the stability and the magnitude of our operating margin needs to improve. As you quoted it very well, our Q1 net income result was positive but barely positive. So we need to build more confidence on this. And this will only come by continue improving our cost base and improving the top line, the revenue flow. With this we can expand the operating margin, generate more cash, and as a consequence we can have a better net income. And this is exactly what we are working on in Nissan.
There's a lot of uncertainty in the market today. Unfortunately we have China, which is a bit unstable. The TIV has dropped. We have held our place in China, but it's a complicated market to operate in today. And we continue to have the issues in the Middle East, which we are making good front to, but it's affecting our ability to supply enough product in the region. Now we are supplying good product, but there's an opportunity left on the table. It means we could be doing even better if this situation was fixed, but this is a world in which we live in. So we need to continue becoming more resilient and improving the fundamentals of the operation.
I think in the measure that we show this resiliency improvement, top-line improvement and the transformation that we are preparing in our midterm plan, I think the confidence from the market will come and we should see movement in our share price.
Right. No, I completely agree with you. These are the two key largest markets in the world today. The situation of the two markets is very different. I think the United States still remains a profitable market for many OEMs. China is not the case. In our case, we're still making a bit of profit, but it's becoming more and more constrained because there's a very heavy pricing war, as you are aware of.
So in China, what we're doing is we are transitioning very quickly to new energy vehicles. On the positive side, we have prepared enough cars offered to our customers. We have more than 15 million customers driving Nissans today. So we have a very strong UIO base which we can cater to. At the same time there's a lot of competition, as you are very well aware, many new launches coming every day, many new brands. So it's a very harsh environment. So we need to very tightly align our product strategy with the marketing and sales strategy.
First thing that we did was to clear up the inventory of product. We had a lot of inventory of ICE. The past few months, we have been focusing on clearing that inventory so that we can give our dealers financial means and the power to bring in new energy vehicle inventory and start deploying these products to the customers. So this was one of the main focuses in the past few months.
Aligned to that, what we have been doing is taking a regional approach to marketing and sales because back in the day you could have one single policy, commercial policy nationwide, because it was a bit more homogeneous market. But lately there's a lot of dispersion in the market. There's some provinces in which you have a lot of NEV penetration, and there's other provinces that are more ICE still because of the incentives that the government is putting, because of customer tastes, for many reasons. So what we're doing is having a more regionalized approach to the market so that we are sure that we are providing the right product but also the right commercial means to support the product.
On top we are deploying what we call the Lighthouse project, which is a commercial excellence program in which we are revisiting the fundamentals of how cars should be sold, delivered, and how customers should be treated throughout the whole process, from the beginning they are contacted all the way to delivery and aftersales. And we are deploying these new practices across different stores. We started a few months ago with a pilot program on a few stores, a handful of stores. It worked very well, and now we're pushing that to have this program in over 200 shops by the end of this calendar year, and even more so early next year.
So with this, we will give our dealer partners the means, the training. We will revisit the CA training and abilities, skills to sell the new energy vehicles in the right way, because it's a bit different to sell a car that is an EV full of technology than a very traditional conventional ICE, which is where we were very strong some years ago. So this is what we're doing in China. So it's a real complete revisit of a product lineup, but combined with the dealer network and marketing and sales program, including our own deployment of resources and organization.
The US is doing very well. We have consistent month-over-month growth on the retail side. So we gave ourselves the mission of focusing on retail customers. And why retail customers? Because these customers are much healthier than fleet or car rentals, both in terms of margin but also in terms of loyalty and also in terms of sales finance and accessory business and other side businesses that we can make profit from. So we gave our teams the focus on really, really targeting the retail market, and we see month-over-month growth. We are the fastest brand growing in the retail sales market. We also focused our strategy on the cars that are built in the US to minimize the impact of tariffs, and with this we maximize also the profit of our business in the US, and this is working. Now moving ahead, what we have...
That's correct. That's right. Yeah, that's correct. Noa. What we have to do moving forward for the US is brand. We need to work very strongly on brand. We are coming from a stage in which we had some difficulties with the perceived quality of some of our products, and the trust from some of our customers was not as strong, and we need to transform that. So in the past, I would say, 12 months, we have focused a lot on communication around trust, about reliability, about quality. And once this is cemented, we want to move into what's next.
What's next is showing a brand that is moving ahead in terms of technology, a brand that is progressive, but a brand that is also accessible. So this is what Nissan does, and this is what we do as a company globally. We prepare good technology centered around customers, but excellent technology that makes people's lives better but is also accessible. And this is what we will start pushing into for brand storytelling in North America and around the world as well.
I think in China you cannot win with speed. It's really mandatory. If you don't have speed, you just simply cannot survive. And the latest NEVs that we have created in China have been developed at China speed. So N7 is a good example. It's a product that was developed and started production in 24 months. So we proved to ourselves that we can compete with the speed of the Chinese.
To answer your point, I think the key is about our heritage, our quality, our distribution network, and also capitalizing on the big UIO that we have. As I said, we have 15 million car owners today in China, car owners that are looking to continue with Nissan, and I think we need to provide them good product, quality product, product that is really satisfying their needs.
And also, I believe as Nissan, we have the ability to be different. Today, when you look at the market or the products in China, it's too homogeneous. It's very hard to say which car is which brand. This is a bit of a consequence of many of the OEMs not really understanding customers properly, started to copy too much to each other. We have 15 million car owners. So the discussions that we're having is stop looking at what others are doing. Let's talk to our customers because for us the secret is to build on the 15 million car owners that we have today that already trusted our brand, and we need to bring good product to them. And this is what we will be doing, again leveraging on our history, leveraging on all the know-how that we have beyond China, all the history and the experience that we have, and bring that to satisfy customers in China in the best way possible.
Show him more.
We delegated a lot of things, but the essence remains with Nissan as a corporation. What I mean by essence is brand direction, the concepts of the cars that we are attacking or that we are preparing, the markets that we are attacking and prioritizing. Those decisions are made still together with the central team. So we have a very light governance because it's very true that we need to be quick, but there are very important strategic elements that we cannot fully delegate. Brand direction, the lineup composition, resource prioritization, all those things are still discussed between the central and the regional teams.
And once we have agreed the concept of the cars that we will be preparing, we fully delegate the execution to the regional team because they know better than what we can do here in Japan. They are in close contact with suppliers. They are really at the gemba. So they can really make very quick decisions and actions that speed up the go-to-market approach in Nissan. But it's very important to focus on the strategy and making sure that the overall strategy is making sense. Otherwise, we can be very quick but going in the wrong direction. And this is not what we want.
Thank you.
Thank you.
I think the one difference between now and then in Nissan is back then there was a very strong intention to grow volume no matter what, and we are not doing that anymore. That's why unfortunately we had to do, with Re:Nissan, a very hard reset of our industrial system to bring it back to reality, because during many years there was no industrial footprint adjustment made in the company, and this is something that was needed. We recognize it, and that's why unfortunately we had to make all these hard decisions that we made.
The break-even point for the company is much lower than what it was in 2016 or 2017. Back then we needed a lot of volume to actually continue generating a good operating margin. That is no longer the case now. And back then some of the leaders of a company wanted to be number one no matter what. Yeah. And this is not healthy for me. This is not the competition for me. The competition is sustain and have a company that can grow organically and that can pave the way to survive five or 10 years down the road.
And to do that the strategy is very different. You need to create more value. You need to create more profit by having organic business that is healthy business, that is coming from satisfied customers, customers that will rebuy your product, that are happy, that are enjoying the services that you're providing. And then you can grow with these customers and just keep them with you in your ecosystem. This is a bit what we're trying to create in Nissan, which is a bit different from what we were doing before.
We had this higher break-even point, and in order to satisfy our industrial system we had to push volume too much, and we were relying too much on car rentals. And you're right, in some years we were actually making 30% or 35% of our volume in the US was coming from rentals, which is nothing to be proud about. We need to really cater to customers, to real people. This is the real challenge that we have ahead of us.
I understand, and we will continue bringing good product in Nissan. So we are just rolling out now the new Rogue, which will be built both in Kyushu but also in Smyrna, and we expect with this product we will start turning out better volumes in Smyrna. The line where the D-segment products is running, it's full.
So the one that we have space is the line in which Rogue is currently produced. So we expect with this we will improve our utilization rate, and moving forward we will add products in this site in Smyrna to help adding to the volume and the utilization rate, but it will be in an organic way. So rather than having more volume pushed into the Rogue, we will bring products that can help us attract different customers, customers that have also need for higher-price product like Infiniti, to give you a bit of a hint of what we're thinking. This is what we are considering to do.
And in Canton we have already announced that we will have coming in the future a family of products that will be produced there. Today we only produce in Canton—we have two lines. We have a frame line where we are only producing the Frontier pickup, and the other line is a passenger vehicle line. So we are now looking at how can we make the best utilization of a line of frame, which again we will expand from having only a pickup to having a family of products. There will be five products running in that same architecture, producing in Canton in that line. And we're seeing how to manage the overflow because now that we are preparing the plan, we're starting to see that maybe the capacity of the line for frame might not be enough for what we are seeing. So we're discussing how we can better organize the system overall.
Well, we're considering many things. Nothing concrete to share today, but we are considering how we can make the best use of the capacity that we have in the US. As much as I can, I would like to utilize that capacity for Nissan product, but if it's not enough, and as I said, we are not going to do crazy things like we did in the past, we are ready to collaborate with somebody that is looking for capacity because in the end it's a win-win.
So there's some other OEMs that are looking for some additional capacity. They don't need to invest because overall the industrial footprint in North America has overcapacity. So it's better to do this kind of mix and match, I would say, that helps both the OEMs that are needing more capacity and it helps the OEMs that have excess capacity to fulfill their factory. So we're open to this. Honda is of course one candidate, but we could consider others as well.
Fore.
I don't know what will happen, to be very honest. Every morning I read different things, but what we're putting our energy on is becoming a more resilient company. That's why we worked a lot on the speed of development, because we see Chinese starting to be very aggressive in China and outside of China, not yet in the US, but we see them coming in many markets in Latin America, in the Middle East, in ASEAN, in Europe. Now the arena of the automotive industry is changing dramatically. So this can come to the US. So for us, now is the time to speed up the transformation of our own supply and industrial system.
This is why we're making many changes, and this is where the family approach is helping us, because here we will provide a lot of good value to suppliers, to our own manufacturing teams, to create a better cost competitiveness. As I was explaining earlier, with the products in Canton plant, with one single architecture we will be producing five cars. The level of commonality on those five cars will be very high. So the number of parts that we have to engineer is much lower. The number of parts that suppliers have to work on is much lower. The number of parts that they have to move and add logistics on is lower. So all this is helping the system becoming much more competitive and quicker.
So this is why we're doing that in the US, and that's also why we announced very recently the transformation for Japan. We're doing exactly the same approach in Japan, where we will have focused plants in focused families. And with these we will bring these values that can create a much better resilient and competitive monozukuri system, both in North America as well as in Japan.
That's exactly right. In the midterm we want one family to be running in one line. This is the most efficient way. Today we have products that are produced in many different parts of the world, and it's really not very efficient when you look at it. You duplicate investments, you duplicate tooling. You have suppliers that are creating the same part in three different parts around the world. So it's not efficient at all. So we are really bringing this to a much more disciplined and simple scheme in which we have one family running in one vehicle line.
So in Kyushu, what we are going to do in the midterm is the Nissan Motor Kyushu plant will be focused on the global B and C families. Nissan Shatai Kyushu will continue producing frame—they are excellent at doing that—and commercial vehicles. And as you were saying, the minivans will be consolidated in Tochigi, where we will have a plant that will be creating the heartbeat model. So they are very good at low-volume, high-quality, high-complexity product. They will prepare EVs, and they will also have a minivan center of excellence.
So with this each of the manufacturing sites will have a clear role, and we will provide our suppliers clarity of what kind of products are coming, a set of families where they can work on having more volume, less complexity, less diversity, and a lot more efficient system overall. With this we want to bring competitiveness to Japan again because we need it. We want to be sustainable. We want a monozukuri system that is sustainable in Japan, and this is the way of doing that and achieving that.
So we're aiming to produce 1 million cars in Japan, both for domestic consumption, but most importantly also for export. We need to improve our exports. And why is exporting important? Because it helps us hedging. So the currency is moving all the time, and when you export, of course the best is to balance around 50/50, and then you can move depending on the currency pressure that you have. So this is what we're trying to achieve with this. We hedge both for currency impact, but also we hedge for market fluctuations. If the market in Japan is in a dip, then we can export more. And conversely, if some markets in the export system are not doing very well because of certain circumstances, we have flexibility. This is what we're trying to achieve strategically overall in.
I think what happened in Nissan, as I was mentioning earlier, there was a race to be a 10 million car company at some point. And back then there was also the story of the BRICs: Brazil, Russia, India and China. And the market circumstance was very different. The economy was booming. So it was for many the time to expand, and I believe we expanded a bit without enough control or discipline. And many markets went differently than what we thought when the BRICs discussion was happening. And I think we're just living that consequence now. And as I said, unfortunately the industrial system was not touched in the past, I don't know, eight or nine years. We never readjusted the industrial system. So that's why we had to do this hard reset last year.
We have made that hard reset, the difficult decisions, and now we are starting to build the strategy properly. Yeah. This is a bit what we're seeing.
I think what we tried was to continue the growth, the same kind of approach, because we thought it was possible, right? But the market circumstances changed a lot. China became a lot more complex. We had COVID in the middle. So there were many circumstances that affected the market situation. So it's hard to put it on one single reason, like maybe you can say management neglected it. But the reality is there were so many changes in the world. Nobody knew what was going to happen. We have now these geopolitics that are also making exporting of cars so much more complicated than what it was 10 years ago.
So all these things change very quickly, and this is just a consequence of the world in which we live, where we have to come back a bit to the basics and have a strategy that is very sound and is creating the right ecosystem for suppliers and manufacturer as well to be very competitive, have simple, really cost-competitive but very attractive product. This is the goal in Nissan.
And we're trying to find a way of making this as popular as possible because it can help us drive the brand image as well. In the short term, I see it as a means to position Nissan as a pioneer of good affordable technology.
From all the different areas working towards making our cars more cost competitive without caring about who gets the credit for it. All get the credit for it as a team. Remove the silos, remove the barriers, speed up decision making, and I think the whole organization learned a lot from this obeya approach, and this is what we want to expand. We want to bring this kind of mentality to every single corner of the company.
I will never be that. The company is much more important than any individual. This is the way I see things and the way I genuinely think. This is for me clear. There's an end to my job. Unfortunately, as much as I like it and as much as I enjoy it, there needs to be a moment for me to step down and bring fresh leaders and fresh view. And we are working on preparing that as well.
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