Nissan's Bad Year Greenlit for a Sequel

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]