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CEO: Nissan performance is hitting 'rock bottom' U.S. Sales Are Dead.


 
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 4 weeks ago '04        #1
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mr_underground|m 2187 heat pts2187
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CEO: Nissan performance is hitting 'rock bottom' U.S. Sales Are Dead.
 

 
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YOKOHAMA, Japan — Nissan CEO Hiroto Saikawa has a plan to reverse the sudden U.S. free fall that has driven the automaker to its worst financial funk in more than a decade — but it's not going to happen quickly.

"People will question why we are not delivering results soon," Saikawa predicted last week while announcing a 45 percent plunge in Nissan's global operating profit for the fiscal year ended March 31. It was the company's lowest in 11 years.

"But we need to be patient here."

That's especially true in the U.S., he emphasized. Saikawa conceded the U.S. recovery will take at least another four years.

And even then, Nissan's U.S. business won't reach the same volume or profit margins it enjoyed as recently as 2017, when Carlos Ghosn stepped down as CEO. In the fiscal year ended that March, Nissan's sales soared to 1.58 million vehicles in the U.S.

In Saikawa's own words, Nissan performance is hitting "rock bottom."

His road map to recovery involves a rush of new products, a rollout of electrified and autonomous driving technologies, job cuts and a clampdown on fleet sales and incentive spending.

Saikawa, who has presided over a post-Ghosn era in which Nissan's U.S. profit engine stalled, now projects U.S. sales of 1.4 million vehicles in the fiscal year ending March 31, 2023.

The U.S. operating profit margin, now languishing at 1 to 2 percent, should climb by around 5 percentage points by then, the CEO said. But that still won't match Ghosn-era highs.

And things will only get worse before they get better.

"We would like to hit rock bottom in 2018 and 2019 and reverse the trend in the following years," Saikawa said. "It will take time to recuperate, and we are ready to spend time."

Nissan forecasts that operating profit will plunge again in the current fiscal year, dropping another 28 percent. Net income, the company predicted, will plummet 47 percent.

Operating profit margin will decline to 2 percent, from 2.7 percent in the just-ended fiscal year.

Saikawa said he wants to restore the parent company's operating profit margin to 6 percent in the fiscal year ending March 31, 2023.

New steps
To get there, he said Nissan will:

Freshen all core models and introduce more than 20 new ones.
Dramatically expand electrified-vehicle sales.
Nearly triple sales of automated driving vehicles.
Optimize global production capacity by 10 percent.
Cut 4,800 jobs worldwide for annual savings of $270.7 million.
In electrification, Nissan wants vehicles with full-electric or the company's ePower range-extender hybrid system to account for 30 percent of global sales by March 2023.

That is up from 4 percent in the fiscal year ended March 31.

In driver-assistance systems, Nissan wants annual sales of vehicles with its ProPilot semiautonomous driving technology to reach 1 million units in the next four years.

Nissan plans to sell that technology on 20 nameplates in 20 markets, Saikawa said.

The technology is popular in Japan, but Nissan has sold only 350,000 vehicles with ProPilot since introducing the single-lane highway driving-assistance system in 2016.

Nissan also wants to streamline product development by leaning more on alliance partners Renault and Mitsubishi for subcompact and compact cars and light commercial vehicles.

That should free resources to invest in fatter-margin large cars, crossovers and SUVs, areas that have been Nissan's traditional strong suit, Saikawa said.

Saikawa touted an upcoming electrified crossover as having the potential to be a brand "flagship" on a par with Nissan's $100,000-plus GT-R sports car.

"It will really lead Nissan toward the future," he said.

The pinch
Nissan and Infiniti combined U.S. sales slid 9.3 percent to 1.44 million vehicles in the fiscal year ended March 31, while market share eroded to 8.4 percent. Saikawa warned that U.S. sales will contract again in the current fiscal year ending next March.

Meanwhile, Saikawa is trying to pivot Nissan away from profit-draining fleet sales and incentives in the U.S. to shore up brand value and margins. Progress there has been mixed.

In January-March, average spiff spending on Nissan and Infiniti brand cars by Nissan Group dropped 6.1 percent to $3,750. But outlays were still above the industry average of $3,574 per vehicle, according to figures from Autodata Corp.

Average industry outlays declined 4.6 percent in the quarter, and U.S. spiffs at Japanese rivals Toyota, Honda, Mazda, Subaru and even Mitsubishi were below Nissan's.

Analysts said any turnaround is easier said than done, especially with the U.S. market softening.

"The things he says he wants to do are all fine, and these are probably the right steps, but if you lower incentives and fleet, your production will go way down, and then fixed costs will be a big impact on earnings," said Christopher Richter, senior auto analyst at CLSA Asia-Pacific Markets.

Richter said he would have preferred bolder plans, such as reconsidering Nissan's presence in markets such as Southeast Asia or Europe, which are well covered by partners Mitsubishi and Renault. Nissan's Infiniti premium brand, for example, is pulling out of Europe.

"They say they will launch a bunch of new models. But that's the typical thing an automaker says when they get into a lot of trouble," Richter said.

Shareholder showdown?
Rebuilding from "rock bottom" complicates the task facing Nissan's embattled CEO as he tries to reform a company still reeling from the arrest of Ghosn last November for alleged financial misconduct. Ghosn denies any wrongdoing. If convicted, he faces up to 15 years in prison.

Ghosn's downfall cast doubt on the future of the Renault-Nissan-Mitsubishi alliance he built into the world's largest auto group. It has also sparked pressure on Saikawa to resign amid criticism that he failed to flag Ghosn's alleged wrongdoing and then let the business suffer under his watch.

At last week's news conference, Saikawa dismissed a question about whether he might resign.

He said his first priority is reviving the ailing automaker.

He said he will pass the baton at the "appropriate time but cannot say when."

Nissan is expected to ask shareholders at their annual meeting next month to vote on a host of corporate governance reforms. Saikawa's reappointment is also on the agenda. He has been nominated for reappointment to an expanded Nissan board as part of a sweeping slate of new directors that would also include Renault Chairman Jean-Dominique Senard and CEO Tierry Bollore.

Some observers say Saikawa runs the risk of being voted off the board by shareholders.

Zuhair Khan, head of research at Jefferies Group and an expert on Japanese corporate governance, said minority shareholders are fed up with Ghosn and quickly losing patience with Saikawa.

"I think Saikawa could get voted off the board," Khan said. "I think it would be better if he steps down before he gets voted off. I think he's going to have a huge problem with that."

Support from Renault, Nissan's top shareholder, with a 43.4 percent stake, is also wavering.

Saikawa was frank about his deepening disagreement with Senard about the future of the alliance. Saikawa said the Renault chairman, who is also a director at Nissan, wants to pursue structural integration or a merger.

That's a non-starter for Saikawa, who wants to keep Nissan more independent.

"Integration could actually undermine the internal strengths we have," Saikawa said. "I have been very consistently very negative against this. That's my position."

Saikawa blamed Nissan's dire straits on the strategies of his predecessor.

He claimed Ghosn recklessly pursued volume by stoking sales with incentives and fleet sales and neglected investment in new product for key markets such as the U.S. by diverting funds into plants and the launch of the Datsun brand for emerging markets.

That pursuit has now saddled Nissan with worldwide factory overcapacity, Saikawa said.

"Most of the problems that I presented today are the negative legacy coming from the old leadership," Saikawa said. "We would like to make recovery happen as soon as possible."

visit this link https://www.autonews.com/ .. ng-rock-bottom

-----

IMO:

- Nissans are boring

- prices aren't competitive for the features

- they're known as CNA/curse cars or hoodrat cars

- they're the main promoters of the CVT transmission which everyone hates

- infiniti has old tech but are charging mercedes prices


Last edited by mr_underground; 05-21-2019 at 05:14 PM..
+22   

69 comments for "CEO: Nissan performance is hitting 'rock bottom' U.S. Sales Are Dead."

 4 weeks ago '15        #2
Madethagreat 19 heat pts19
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Can see why while other cars are making extreme changes they get stagnant in certain periods

That new Altima and maxima body style is fire

Their suv department a*sssssss on a*ssssssss
+17   

 4 weeks ago '10        #3
ColeWorld 48 heat pts48
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Nissans are bottom of the barrel
+4   

 4 weeks ago '11        #4
tonio25 6 heat pts
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All there sh*t looks the same. If they want to make sh*t boom lower the price of the GTR
+21   

 4 weeks ago '11        #5
marty mcfliz 
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They need some style. Bring back the classic se-r but modernized. Bring the 240sx back to compete with the frs. They been using turbos in jp. They cars are straight butt ugly now
+16   

 4 weeks ago '05        #6
Daddy Black 2 heat pts
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Nissan is trash now. All they got is the gtr which is only going to get more expensive. The cvt transmissions their sedans and suv’s use are the worst in the business, overall build quality is not good. Infiniti has dope cars but the tech in them are dated
+18   

 4 weeks ago '16        #7
NYNY 
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Nissans ain’t appealing
+1   

 4 weeks ago '17        #8
quarter 138 heat pts138
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What's up with the CVT transmissions?
+1   

 4 weeks ago '09        #9
NcAlien 2 heat pts
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They haven't done and interior refresh since 2006ish

Their luxury brands lacks substance.

Their economy brand is poor performing in every aspect of this segment.

If you follow the car industry this should come as no surprise.

TBH they could sell me a sub 25K RWD VQ sedan with a manual transmission with no features though.


Last edited by NcAlien; 05-21-2019 at 06:51 PM..
+6   

 4 weeks ago '05        #10
KDE21K 
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 quarter said
What's up with the CVT transmissions?
Nissan's attempt to increase gas mileage but the transmission is weak, I had to get a new tranny for 2k on my altima....
+6   

 4 weeks ago '17        #11
2007 2 heat pts
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Maximas were great
+4   

 4 weeks ago '15        #12
Prad Bitt 
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Should’ve built this started a new wave in affordable vehicles.

[pic - click to view]

+23   

 4 weeks ago '16        #13
mlbnba2016 160 heat pts160
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Only good whip they got is the Altima
+1   

 4 weeks ago '15        #14
OsirisReborn 
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The 2nd hand Nissan game is still strong
+14   

 4 weeks ago '15        #15
MemphisBleek 2 heat pts
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Everyone walked away from the transmission factory. Nissan brought it.
+1   

 4 weeks ago '05        #16
Sub Crazy 15 heat pts15
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 OsirisReborn said
The 2nd hand Nissan game is still strong
Best used car to Uber in.

They ain’t worth sh*t and you can get your hands on one for a cheap a*s price. I got a 2011 with Navi, leather, push start and heated seats for $6000 with only 79,000 miles.

I could not beat that. No need to factor in depreciation when your car is fu*king worthless
+14   

 4 weeks ago '17        #17
HipHopJunkie 2 heat pts
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They had a nice little run when them Zs dropped.

Car industry is doing terrible right now tho. All of them have to tighten up one way or the other.

Ford just laid off 10k executives or some sh*t to get ready for this car skid that coming.
+3   

 4 weeks ago '15        #18
Madethagreat 19 heat pts19
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 quarter said
What's up with the CVT transmissions?
They go like fu*k

But brand new itís a fu*kin dream (got a brand new thru warranty)

I feel zero gear change and I Drive Fast so from 60 -100 is smooth as sh*t usually
-2   

 4 weeks ago '11        #19
Unattached 46 heat pts46
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 Madethagreat said
Can see why while other cars are making extreme changes they get stagnant in certain periods

That new Altima and maxima body style is fire

Their suv department a*sssssss on a*ssssssss
This. They need to fire all of their suv designers and whoever hired them

 4 weeks ago '15        #20
Madethagreat 19 heat pts19
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 Unattached said
This. They need to fire all of their suv designers and whoever hired them
How did they fu*k up the murano and the pathfinder ?

Tbh those sh*ts should’ve sold themselves

Rogue and juke were always fugly a*s cars
+3   

 4 weeks ago '17        #21
Lazy 4 heat pts
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 HipHopJunkie said
They had a nice little run when them Zs dropped.

Car industry is doing terrible right now tho. All of them have to tighten up one way or the other.

Ford just laid off 10k executives or some sh*t to get ready for this car skid that coming.
Too big to fail 2.0
+1   

 4 weeks ago '18        #22
DUCEDUCE 11 heat pts11
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Nissan cool affordable and durable. I drive to and from work all I need is a bluetooth stereo fu*k a luxury car rather take a nice vacay
+1   

 4 weeks ago '19        #23
JamesFranco 27 heat pts27
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Make every car $500
+1   

 4 weeks ago '16        #24
Boogersugar 56 heat pts56
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 JamesFranco said
Make every car $500
Instead, Porc, you should k*ll yourself
-1   

 4 weeks ago '16        #25
jetlife510 3 heat pts
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New maximas are dope. Handling could be better. Was airing sh*t out on the freeway when I had it for a rental
+1   

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