Ghosn to step down as Nissan CEO to focus on the Alliance

24 February 2017

Ghosn to step down as Nissan CEO to focus on the Alliance

February 24, 2017

Carlos Ghosn is to step down as chief executive officer (CEO) of Nissan after 16 years at the helm. He will remain chairman of Nissan’s board of directors, and will now concentrate on strengthening the wider alliance with Renault and scandal-hit Mitsubishi Motors. He will remain CEO of Renault, an indication of the extent of the problems he still sees at the French carmaker. 

Hiroto Saikawa, will become sole chief executive, after serving as co-CEO since November. These changes will take place from 1 April. He is an experienced cost-cutter who has spent much of his long career at Nissan managing purchasing supply chains. He is also chairman of the Japan Automobile Manufacturers Association (JAMA). 

Ghosn still has a number of issues to tackle. His focus on Renault will likely be to ramp up pressure on the French government to relinquish control of the company, after it caused tensions by raising its stake in Renault to 20% without warning in April 2015. This caused hostility in last April when the French state voted against Ghosn’s proposed pay package at Renault.  

The tightening of emissions regulations has also highlighted issues in the alliance as plans to integrate engines and gearboxes are moving more slowly than originally planned.  

Bringing Mitsubishi into the fold catapulted the alliance to the position of fourth-bestselling carmaker globally, with its near-10 million vehicle sales. If, as expected, General Motors sells its European operations Opel and Vauxhall to PSA Group, the alliance will secure the third spot and it will only be 350,000 vehicles short of Volkswagen, the world’s best-selling carmaker.  

However, Takeshi Miyao, Asia managing director at consultancy Carnorama, told Reuters that the alliance is unlikely to reach the heights of lead competitors Volkswagen and Toyota unless it can strengthen its business beyond pure sales figures. 

He said: ‘Ghosn is likely to focus on strengthening and raising profitability at all the alliance members so that they are not overly dependent on Nissan. Even if the alliance as a whole produces 10 million cars, if 3 million of those cars are not profitable it will be difficult for the alliance to continue.