Nissan revs up growth efforts after Ghosn's removal from board

TOKYO - Dismissing Carlos Ghosn from its board was just the beginning of efforts by Nissan Motor Co to secure its future as it seeks to catch up with rivals in adapting to a rapidly changing business environment.

Four months after Ghosn's arrest plunged the automaker into protracted turmoil, Nissan shareholders approved Monday at an extraordinary meeting the removal of the former chairman from his last remaining post, formally bringing an end to his nearly two-decade-long leadership.

CEO Hiroto Saikawa said at the meeting that Nissan is now moving into a new stage, acknowledging that it has fallen behind the pace in embracing new challenges.

While Nissan was busy reforming its governance and establishing its new management following Ghosn's arrest, its major competitors boosted the introduction of new strategies to address shifting demand as more customers see a vehicle as something not to own but to share.

"In today's auto industry era, a car company cannot just sell cars (to survive) but is required to propose ways to use cars in an attractive way," said Satoshi Nagashima, managing partner (Japan) at consulting firm Roland Berger.

Delays in developing new technologies and products poses a serious problem at a time when automakers are confronting intensifying competition with new rivals such as technology giant Google LLC and leading ride-share service provider Uber Technologies Inc.

"A car company can only afford to stay behind for three or six months at most. After that, you can't catch up with rivals," said Tatsuo Yoshida, a senior analyst at Sawakami Asset Management who used to work for Nissan.

Nissan may have an edge in electric vehicles with its Leaf electric hatchback, and its alliance formed with Renault SA and Mitsubishi Motors Corp became the world's No. 2 auto group last year in global sales.

But it seems to be lagging behind rivals in ride-sharing and ride-hailing services and internet-connected vehicles, analysts said.

Major automakers are scrambling to team up with others to develop technology and gain know-how necessary for new services with increased investment.

Volkswagen AG -- the world's largest carmaker by volume -- said last month it will invest 44 billion euros ($49 billion) by 2023 in autonomous vehicles and digitalization, while teaming up with Ford Motor Co on self-driving and electric vehicles.

German carmakers Daimler AG and BMW AG have also joined hands on autonomous vehicles, while General Motors Co paid more than $1 billion to buy Cruise, a self-driving company.

In Japan, Toyota Motor Corp is no longer sticking to traditional business groupings and alliances, as it looks to tie-ups with technology groups such as SoftBank Corp and Uber Technologies. Toyota President Akio Toyoda has vowed to offer new services beyond just manufacturing and delivering vehicles.

Honda Motor Co decided last month to invest in autonomous vehicle service venture Monet Technologies Inc set up by Toyota and SoftBank. The strategy follows Honda's plan to invest in GM's Cruise last October.

Nissan said in February last year that it was launching joint public tests of ride-hailing services with mobile service provider DeNA Co. But no other major deals have been announced.

Sawakami Asset's Yoshida said Nissan has to make up ground on its rivals.

"It goes without saying that Nissan needs money, time and investment in human resources to respond to the changing auto industry," he said. "It is crucial that Nissan (first) installs a new leadership and rebuilds relationships of trust with Renault and its employees" to move forward with the new strategies.

Before embarking on the new services and technology, Nissan's immediate task is to launch a new board expected to be approved at an ordinary shareholders' meeting in June.

Saikawa said at the shareholders' meeting on Monday that he is fully aware of the need to work with a sense of speed in the fast-evolving auto industry.

"I cannot help but accept the fact that we have slowed down in the past few months," Saikawa said. "Technological innovation is not waiting or stopping and I am aware that we are in a very difficult situation."

Roland Berger's Nagashima said Nissan should try to maximize the synergy effect of the alliance to create new services and technologies and become a "unique existence" in the auto industry like Toyota, which recently said it would take part in a space exploration project.

Nissan also has a challenge in the short term. Its profitability has been faltering recently with slumping sales in the United States and China, the two biggest markets for the company.

The carmaker cut net profit forecast for the fiscal year ended March 2019 in February, projecting a 45.1 percent drop to 410 billion yen ($3.6 billion).

Source: https://japantoday.com/category/business/focus-nissan-revs-up-growth-efforts-after-ghosn's-removal-from-board