By on May 14, 2019

Nissan is bracing for a bad year. On Tuesday, the automaker held a press conference at its headquarters in Yokohama, Japan, to tell the world that it’s forecasting a 28-percent decline in operating profit this year. While that sounds bad, it comes on the heels of the company’s financial results for the 12-month period ending March 31st, 2019 — which was a dumpster fire.

Operating profit plunged 45 percent to 318 billion yen ($2.9 billion), while revenue fell 3 percent to about 11.6 trillion yen ($105 billion). Vehicle sales were down 4.4 percent. “Today we have hit rock bottom,” CEO Hiroto Saikawa told the press, suggesting the company could rebound in a few years. 

Saikawa attributes much of the automotive firm’s current woes to the “negative legacy of our old leader” Carlos Ghosn, whose reputation was defiled by the findings of an internal investigation. The ousted chairman claims the probe, and the allegations stemming from it, were a corporate coup set up to remove him from power and halt a potential merger between Nissan and alliance partner Renault.

Ironically, Ghosn was universally championed as the man who saved Nissan from the brink of disaster in 2002. He’s now under constant supervision by Japanese authorities while awaiting trial.

However, as good as the company falling apart in his absence makes things look for Ghosn, some of Nissan’s current issues are the direct result of his decisions. During his tenure, Ghosn set wildly aggressive sales targets that forced the company to become largely dependent on incentivizing in the United States — making for razor-thin margins. While not much of a concern when sales were strong, the brand’s U.S. volume fell by 9.3 percent last year.

Another ghost that has come back to haunt Nissan is the aforementioned merger push. During the conference, Saikawa addressed the ongoing amalgamation concerns. “[Renault chairman Jean-Dominique Senard] has one idea in mind, which is integration or merger,” he said. “What we’ve told Mr. Senard is this is not the right timing to discuss this matter,” noting that he and other Japanese executives have consistently been opposed to the idea.

Nissan’s dismal fiscal performance and the CEO’s ominous predictions led reporters to ask whether Saikawa would step down — something he planned to do prior to Ghosn’s arrest, possibly due to rumors that he was to be fired by the former chairman. Saikawa reneged on that promise after Ghosn’s November arrest. According to Reuters, he was noncommittal at the press conference.

“Timing is a matter I need to decide,” he said, adding that he would step down “at the appropriate time” and had nothing further to say on the matter.

[Image: Anton Watman/Shutterstock]

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30 Comments on “Nissan’s Bad Year Greenlit for a Sequel...”


  • avatar
    eggsalad

    Why blame your mediocre lineup when you can blame your ousted ex-CEO?

  • avatar
    SCE to AUX

    “Saikawa attributes much of the automotive firm’s current woes to the “negative legacy of our old leader” Carlos Ghosn”

    What a crock. 99% of consumers can’t name the CEO of the mfr of the car they’re shopping for, and moreover, they don’t care.

    Maybe there’s a problem in the showroom?

  • avatar
    cimarron typeR

    I just know one thing about Nissan.They’re sedans (Altima,Maxima mostly) have surpassed the Kia as “the most poorly driven” as conducted by me in a highly scientific test

  • avatar
    cicero1

    errr, why not just blame Russian collusion as well.

  • avatar
    Groovypippin

    I think the questions Nissan’s new CEO should be asking himself are these: “What products do we sell than could be described by anyone as best in class?” and “How can build value in our brand aside from cash on the hood?”. In recent years, Nissan has become a brand that peddles mediocre product with high incentives.

    When I look up and down the Nissan line-up I see one volume product that answers those two questions positively – the Nissan Leaf (at its price point). I see two other products that fill smart niches at good prices (though neither could be described as a “class leader”) – The Nissan Kicks and the Qashqai.

    Everything else is a sea of bland mediocrity.

    • 0 avatar
      ravenuer

      Well, where I live, on Long Island, NY, almost every other car I see on the road is an Altima. And a bunch of Rogues.

      • 0 avatar
        Groovypippin

        That isn’t at all related to what I wrote. I didn’t say that Nissan product doesn’t sell. It sells. The problem is that Nissan has bought market share with high incentives with no discernable plan to pull itself out of that death spiral. People, in most cases, buy Nissans because they are a good deal, not because they are the best choice. One of the (many) issues that creates is huge problems for the manufacturer at the end of leases. They perennially bet high on residual values to sweeten lease deals and are left holding the bag on lease returns in the future. Consumers don’t see those loses, but they can amount to hundreds of millions of dollars.

        • 0 avatar
          redapple

          -Groovy…..

          “People, in most cases, buy Nissans because they are a good deal, not because they are the best choice.”

          And right there with them are Hyundai – Kia Vomit.

          EVERYONE- WHAT ARE THE RESULTS OF YOUR SURVEY OF HK TAIL LIGHTS? I WAS RIGHT WASNT I???????

          • 0 avatar
            SCE to AUX

            The 6 H/K’s and 1 Nissan I’ve had are the best vehicles I’ve owned in 40 years of driving, being reliable and cheap to own.

            In 29 cumulative years of H/K ownership, I don’t think I’ve replaced a single taillight. But I did replace both headlights in my 02 Passat after only 2 years.

            Your poll results may vary.

          • 0 avatar
            CKNSLS Sierra SLT

            redapple

            I’m going on a year and a half of ownership-the tail lights are fine.

            Here in Utah the Kia Tellurides are flying off the lots. Obviously-people think differently than you.

            BTW-what do you drive so I can site the (probable) myriad of recall histories against your brand love affair…..?

            Every car maker has them……

  • avatar
    EquipmentJunkie

    Peter M. DeLorenzo has Nissan in the crosshairs in his Autoextremist blog this week. He has had few kind words for Nissan in the past year or two.

    I keep coming back to the lack of exciting product in the showrooms. Good product always seems to raise all boats.

    • 0 avatar
      dukeisduke

      Yeah, he roasted both Ghosn, and Nissan management. And things are not all rosy for Audi, either. For those interested in reading this week’s Rant, here’s the link:

      http://www.autoextremist.com/current/2019/5/13/nissan-craters.html

  • avatar
    TotalNonStopCars

    Nissan gonna Nissan.

  • avatar
    rudiger

    Never much liked Nissan products. A long time ago, they seemed to move into the same category as Chevrolet: mediocre vehicles selling mostly to those who couldn’t get credit to buy anything else. Even today, as mentioned, they’re in with the likes of Hyundai, Kia, and Mitsubishi in that regard.

    And reviews generally panned them, as well. One of the areas that I frequently noticed was Nissan would advertise horsepower figures and power-to-weight ratios above those of all the competition. Yet, when they were actually tested, for some reason, the performance results had the Nissans routinely falling near the bottom.

  • avatar
    tankinbeans

    The only thing I believe I know about Nissan is that at one point in the mid to late 90s they tried to position themselves as the sporty Japanese brand. Of course that could be a false memory as I wasn’t entirely conscious of the automotive landscape at the time.

    Otherwise, I have no experience with them other than driving my friend’s 08 Sentra when I took them to the airport. At the time I had my Kia, which I felt was a marginally better car despite its major issue.

    • 0 avatar
      Inside Looking Out

      Yes, in some aspects. Maxima (and later Altima) was designed like kind of FWD sport sedan. It even had a following – Maxima had a cult status in certain circles, mostly young adults. Kind like a more refined and more reliable version of muscle car. Then all that gradually disappeared and both Maxima and Altima became Taurus replacement in rental fleets after Taurus was discontinued and today is less refined and less reliable than D3 analogues. And Maxima became a whale rental companies cherish so much these days – I had misfortune get one as a rental once.

  • avatar
    PandaBear

    It is the poor reliability (largely CVT) that finally comes back to haunt them.

  • avatar
    stingray65

    I can’t believe it – after all they are among the world leaders in EVs with their popular Leaf. They should be shoveling in the profits from that alone.

  • avatar
    thornmark

    interesting, no wonder they want to “merge”

    from 5/13/19

    “Bloomberg Intelligence analyst Michael Dean estimates that Renault’s core business, excluding its stake in Nissan and its net cash, is valued by the market at less than zero.”

  • avatar
    cbrworm

    Nissan (and Mitsubishi) used to be only slightly worse than their rivals. They were not as good as Toyota and Honda, but they weren’t far behind. It seems that Mitsubishi fell off a pretty steep cliff during or after the DSM project, followed by Nissan – probably due largely to the CVT. I’ve owned a bunch of Nissan and Infiniti cars and trucks, and they have all served me very well. I’ve also owned a number of Toyota, Lexus, Mitsubishi, BMW, Mercedes, and occasionally domestic vehicles – so I have examples for comparison.

    I still get Nissans as rentals fairly frequently and I still enjoy the comfort and relative performance of the Maxima and even the Altima. I get the feeling that they are underappreciated. I avoid owning them due to CVT reliability concerns, but I don’t even know if that is still an issue.

    All of that to say, as a consumer, I don’t buy new Nissans any longer and it isn’t due to Ghosn’s legal status, it is due to mostly to the CVT and partially due to percieved quality issues that I didn’t see prior to Ghosn’s salvation of Nissan.

  • avatar
    duncanator

    Get rid of the XTerra and let the Frontier rot as sales of trucks and SUV’s blow up. Why buy a new Frontier when you can get a 2010, which is practically the same vehicle?


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