TOKYO (AP) — Nissan is seeing sales and profits tumble, as its once revered former chairman, Carlos Ghosn, awaits trial on charges of financial misconduct.
Nissan Motor Co said it is beefing up corporate governance and sticking with its alliance with French partner Renault SA and smaller Japanese automaker Mitsubishi Motors Corp. That’s critical to getting sales back on track, analysts say. But the way forward is clouded by questions about setting strategy without a visionary Ghosn there to guide it.
Some issues critical for Nissan’s future:
WHO’S IN CHARGE?
Nissan veteran Hiroto Saikawa took over as CEO in 2017. But Ghosn remained chairman until he was dismissed after his November 19 arrest. Saikawa has said an internal investigation found Ghosn amassed too much power and engaged in unprofessional and unethical dealings. Ghosn said several Japanese executives at Nissan plotted against him in what he calls “a conspiracy.”
Regardless of the blame game, the maker of the March subcompact, Leaf electric car and Infiniti luxury models got approval at a shareholders meeting in early April to appoint Renault’s new chairman Jean-Dominique Senard as chairman to succeed Ghosn. It’s unclear who is making calls on strategically vital decisions, such as where to make certain model vehicles.
“Mr Saikawa may have been overseeing the day-to-day operations, but all the big decision-making lay with Mr. Ghosn,” said Koji Endo, auto analyst with SBI Securities Co in Tokyo.
The scandal remains a distraction and several Nissan executives, including Saikawa, have been called in for questioning by prosecutors. The CEO has dodged calls for his resignation, saying getting the automaker back on track is his priority.
Ghosn’s detractors say his main contribution to Nissan’s revival was cutting jobs, which he did with zeal while restructuring the automaker early in his nearly 20-year tenure. But he also is credited with spearheading Nissan’s move into electric vehicles with the Leaf, now the best-selling pure electric car, and pursuing growth in China, whose market is slowing but is still the world’s biggest for vehicle sales.
HOW ARE THINGS GOING?
Nissan’s vehicle sales in Japan tumbled 18 per cent in March compared to a year earlier, according to the Japan Automobile Dealers Association. Nissan’s overall sales fell 10 per cent in the first quarter. In the United States (US), Nissan’s first quarter sales fell 12 per cent, while Toyota’s slipped five per cent and Volkswagen’s rose two per cent.
Endo said buyers in Japan and France are concerned about resale value, which tends to go down when automakers encounter scandals.
Nissan has logged 9.2 billion yen (USD83 million) in costs from alleged underreporting of Ghosn’s compensation. It has downgraded its profit forecasts for the fiscal year through March twice and now projects a 319 billion yen (USD2.9 billion) profit, down from its initial projection for a 500 billion yen (USD4.5 billion) profit.
Nissan shares, which have stagnated somewhat in recent years, have dropped about 10 per cent since Ghosn’s arrest.
And the company recently has lost several other strong executives, including Jose Munoz, a Ghosn ally who had been Nissan’s chief performance officer and has moved to Korean automaker Hyundai Motor Co. Nissan’s Executive Vice President Daniele Schillaci, in charge of global marketing and zero-emission vehicles, left to become chief executive at Italian brake-maker Brembo.
Still, the automaker remains strong: its Note compact, an electric car equipped with a small gas engine to charge its battery, was Japan’s No 1 selling car for the fiscal year through March. It was the first time in 50 years that a Nissan model won the honours, beating powerful local rivals Toyota and Honda Motor Co.
WORD ON THE STREET:
Nissan’s dealers are hoping the whole drama will just blow over.
Customers coming into showrooms do talk about Ghosn’s case, said Akio Yoshida, a spokesman for Nissan dealerships in Tokyo.
“The damage to our sales is not zero,” he said of the Ghosn saga. “But now it’s more a tabloid drama. And we are focussed on selling good products.”