Per Reuters, Nissan Motor Company (NSANY - Free Report) will slash 1,000 workers at its two plants in Mexico. Situated in Cuernavaca and Aguascalientes of Mexico, these two manufacturing hubs will lay off their workforce, owing to challenging market environment.
In fact, Nissan has already commenced with the process of reducing its workforce in the Aguascalientes plant. However, the company has not yet determined the job cut distribution across the two plants. The company has decided to reduce the workforce as it aims to change vehicle production levels in order to combat challenging market conditions.
Revenues of Japanese automakers in the United States were strained, with continuous reduction in sedan sales. Over the past 11 months, beginning in January, Nissan’s Versa sedan witnessed a year-over-year sales decline of 30.7%.
Nissan Motor Co. Price and Consensus
In May, Nissan announced to cut vehicle production in North America by about 20%. Waning profitability in the United States prompted this automaker to make such a move. Now, the company aims at improving profitability in North America while also raising sales in China, which is the biggest auto market in the world.
In the second quarter of fiscal 2018 (ended Sep 30, 2018), Nissan’s net sales missed the Zacks Consensus Estimate while earnings surpassed. Additionally, for fiscal 2018 (ending on Mar 31, 2019), Nissan expects to witness year-over-year rise of 0.4% to ¥12 trillion in sales and operating income is anticipated to decline 6% to ¥540 billion.
Year to date, Nissan’s stock has lost 21.2%, outperforming 29.6% decrease recorded by the industry it belongs to.
Zacks Rank & Stocks to Consider
Nissan currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are Fox Factory Holding Corporation (FOXF - Free Report) , Tesla, Inc. (TSLA - Free Report) , and CarGurus, Inc. (CARG - Free Report) . Fox Factory and Tesla currently sport a Zacks Rank #1 (Strong Buy) while CarGurus carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Fox Factory has an expected long-term growth rate of 5%. Shares of the company have increased 39% year to date.
Tesla has an expected long-term growth rate of 35%. Shares of the company have rallied 2.7% year to date.
CarGurus has an expected long-term growth rate of 5%. Year to date, shares of the company have gained 2.8%.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>