Beware The Ides Of March: Nissan In Deep Kuso

Bertel Schmitt
by Bertel Schmitt
beware the ides of march nissan in deep kuso

In 1999, a French-Brazilian-Lebanese businessman saved a large Japanese automaker from certain bankruptcy. Since then, Carlos Ghosn, cost cutter extraordinaire, wears the dual crowns of the presidency of Renault and Nissan. The Japanese crown is turning into a very heavy burden. According to Tokyo’s Nikkei (sub), Carlos Ghosn, “is facing an even more daunting challenge of securing profits amid the yen’s rise and the deep economic downturn. Ghosn acknowledges that the external environment facing Nissan is far more bleak than in 1999, when Nissan was trying to rise above damages that were largely self-inflicted.” Fixer Ghosn is softening the blow for the announcement that he can mend self-inflicted wounds. But he isn’t godlike – yet – to save Nissan from external damnation. Nissan appears to be in deep, deep kuso. Ghosn is fighting two armies of windmills:

A worldwide plunge in sales caused by the financial crisis, and the yen’s advance against other currencies. Ghosn has no other choices than to improve short-term earnings by mortgaging Nissan’s future: Plans for new factories are being scrapped; budgets for development projects are being cut. Two sacred cows are being turned into Kobe beef.

Sacred cow three: Nissan is set to move production of its March subcompact to a factory in Thailand. Japanese automakers moved production overseas when the yen was strong in the 1990s, but this mainly covered vehicles for export. Domestic production was maintained to keep jobs and technologies in Japan. Says the Nikkei: “But with domestic sales declining, it has become difficult for Nissan to develop vehicles exclusively for the domestic market. The decision to turn the March subcompact into a global vehicle and to produce it in Thailand marks an end to the automaker’s long-standing practice of making cars for the domestic market at home.”

When the March is due for a full remodeling in 2010, Nissan will stop production in Japan and import all units for the domestic market from Thailand.

According to the Nikkei, “the redesigned March, to be sold in Japan and emerging markets in Asia, will use a chassis developed with French partner Renault SA. Production costs for the car will be cut by about 30 percent by procuring more parts locally — about 90% — in addition to using a common chassis.”

A whole slaughterhouse of sacred cows is likely to follow. It’s either that, or certain bankruptcy again.

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  • FromBrazil FromBrazil on Jan 18, 2009

    Maybe Michael Karesh could report on the CVT thing, since he is in a good postion to do so. Similar to what I said on the European euthanizing thread, you really think the Jap gov is going to let anybody go down? Seriously? On C. Ghosn, his time's up. You cant cost cut your way to prosperity eternally. He did a fine job the first moment, but he's long outlived his welcome or use. His "magical" wielding of the cost-cutting scissors by now is causing Nissan more damage than good. Good riddance Mr Ghosn! Go enjoy your multi-million retirement somewhere. Please.

  • Volvo Volvo on Jan 18, 2009

    With CVTs reliability isn't the issue for me. Repairability is the issue. At the current time my understanding is that Nissan CVTs either cannot be repaired in the field or Nissan will not repair them in the field. That means you get a reman or new transmission when yours fails. I believe the current price for R/R when out of warranty is in the range of $5,000 - $6,000. The last time I had a standard auto transmission rebuilt (2006)the cost for parts and labor was $1600.

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