Nissan Admits Major Mistakes Have Been Made

Industry News / 11 Comments

Lessons have been learned and it's time to move forward.

Nissan's troubles really began before the November 2019 arrest of now-former CEO Carlos Ghosn. Under Ghosn, the Japanese automaker, together with its alliance partner Renault, embarked on an era of expansion that aimed to achieve an eight percent global market share at an eight percent margin. Last year, Nissan managed just a 5.8 percent share and suffered about a $400 million operating loss. Now in the post-Ghosn era, Nissan has embarked on a major global turnaround plan we've reported on before, specifically focusing on markets where there's a greater chance of success, specifically North America, China, and Japan. Operations will be scaled back in Europe and the Datsun brand in Russia is being shuttered.

Speaking to Car Magazine, Nissan's new chief operating officer, Ashwani Gupta, acknowledged where things went wrong and the lessons the company has learned.

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"We went too fast to expand in the world, anticipating that global auto markets would grow and that our sales performance would be excellent. Both those things didn't happen," he said. "When rubber touches the ground you smell the smoke. As a result, we were landed with aged vehicles, a huge line-up which we could not maintain. It's all based on investment: if you don't have the revenue you can't have [new] cars. It's a vicious cycle."

Rationalization was key to breaking that cycle. Significant cost-cutting measures are being enacted, such as closing some plants and working more closely with Renault whose specialty is the B-segment (superminis) and vans. Nissan will take the lead on EVs, sports cars, and larger vehicles - three key segments for America.

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We know that a new Nissan Frontier midsize truck is coming in 2021 and the nearly decade-old Pathfinder crossover requires a major redesign. The completely redesigned Rogue has great expectations, and the new 400Z, based on the Proto Z concept, is on the way as well. Gupta didn't mention anything about the next GT-R, another aging model, but did admit work has already begun on the next Z car. The GT-R and 400Z will not be sold in Europe because of more stringent emissions standards.

Gupta's turnaround plan is certainly an excellent start but the troubles faced by the entire auto industry in 2020 could make Nissan's recovery all the more difficult.

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Source Credits: Car Magazine

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