Commentary: Nissan's Latest Path Forward

How can a company reverse its course after a single person basically screwed them over?

This is the challenge of Nissan as it announced its plan going forward from massive global financial losses and sales. This plan was announced by Nissan CEO Makato Uchida at their headquarters in Yokohama, Japan, as some of these measures and plans have been reported elsewhere in bits and pieces.

Nissan is looking to regain some profitability by rationalizing operations worldwide. They want to focus on a few key markets while ensuring their presence is there elsewhere by utilizing the combined assets of the Renault Nissan Mitsubishi Alliance.

To accomplish this turnaround, Nissan has set a target of 2023 to earn a five-percent profit margin and a six-percent share in the global automotive market. To do so, Nissan announced that they will “right-size” their global production capacity worldwide by 20%. The result should be a reduction of vehicle offerings from the current level of 69 down to 55 models.

More specifically, Nissan intends to close its plants in Barcelona, Spain, and in Indonesia. In North America, Nissan stated they will "consolidate" their North American production "around core products." The Alliance partners will be asked to help fill in the gaps to share resources in terms of "production, models, and technologies," according to Nissan.

There had been some backlash regarding the proposed closure of the plant in Catalonia. Partly because Nissan will continue to operate their plant in Sunderland in the UK. Whether this decision was based on the UK's exit from the European Union was not clear when this plan was announced. One would speculate that one way or another whether closing the Barcelona plant and keeping the Sunderland facility operating was the right decision to make when it comes to the trade situation in Europe when Brexit is actually a done deal.

While there is a question of the brand’s sustainability in Europe, Nissan made it clear that their focus on the first part of this decade and beyond will be on its "core markets" of Japan, China, and North America. They also stated that they will no longer have a sales division in the Republic of Korea and will pull the budget-priced Datsun brand out of Russia. Other markets in Asia will see their Nissan operations "streamlined" and leveraged with other Alliance members. This could be a golden opportunity for Mitsubishi, a brand strong in Southeast Asia, to fill in the gaps for Nissan in these areas.

Many of our fellow automotive outlets have been focusing on Nissan’s plan to introduce 12 new models in the next 18 months. A video was released showing that in North America we should expect a new generation mid-sized pickup truck, along with new versions of the current SUV lineup. The big headline came as the video showed a silhouette of the upcoming new Z sports coupe. Believe me, the enthusiasts have noticed.

However, it appears that there will be no new GT-R in the company’s future. It is safe to say that it might be true. Then again, anything can happen between now and the end of 2023.

Nissan will continue to offer electrified vehicles, as well as expand on their semi-autonomous driving technology. Going forward, their strategy is to expand these technologies to their core markets. The ProPILOT driver assistance system will be introduced in "more than 20 models in 20 markets" by the end of 2023. You will be hearing more about e-POWER, Nissan’s newest electrified drive system that will be part of their expansion into sustainable transportation. Nissan projects to have sold 1 million electrified vehicles by the end of 2023.

There were plenty of questions regarding the future of Nissan’s luxury brand, Infiniti. The keyword for this brand is "reboot." After reading some stories about the situation at Infiniti, it appears that Nissan will reposition its upmarket brand in what used to be called the "mid-priced field." This segment is currently populated by Acura and Buick.

All of this points to one thing: Nissan is not looking for a plan just to survive. No one wants an automotive firm to simply live off of a survival plan. However, Nissan had been through many peaks and valleys over its history that it seems that this time will be critical to the company's existence.

This has been a scenario for many automotive firms throughout the history of the automobile. How many lives have Chrysler been through? It’s current life as Fiat Chrysler Automobiles will be changing yet again as they finalize the details of their merger with PSA Groupe.

There has been good work already achieved by Nissan. It has to come down to execution of this work. I reported earlier how Nissan's top USA dealerships expressed their dissatisfaction with the brand to CEO Uchida. Reversing the reputation of the brand is critical to the company’s survival in North America and beyond.

Nissan’s alliance with Renault and Mitsubishi will be leveraged in more markets than their statement made. Yet, there are some stumbling blocks towards achieving this. Recently, Renault announced a layoff of 15,000 workers. Mitsubishi had some management changes globally, in particular the change at the top of Mitsubishi Motors North America.

As Nissan restarts production at its Canton, Mississippi plant, there are too many questions and concerns that need to be addressed before progress can be made with the company. If there one thing for sure, a company like Nissan is simply too big to fail. Not with its decades-long legacy on the line. But, Uchida needs to show us proof that Nissan can emerge from a pandemic-induced economic downfall and the fiscal controversy involving its former CEO/Chairman to meet its goals for the end of 2023.

Photo by Randy Stern

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