Nissan’s CEO Makoto Uchida on Nissan’s future

The worldwide vehicle market has actually been overthrown by the coronavirus pandemic, with production plants surrounded the world and vehicle sales stopped throughout lockdowns.

Now carmakers are seeking to increase competitiveness and success in a fast-changing world, with the shift to greener innovation another huge difficulty the sector is dealing with. 

Last week, Japanese carmaker Nissan exposed a bottom line of 671.2 billion yen ($6.17 billion) in the 2019, its very first yearly loss in more than a years. On the very same day, it revealed a four-year strategy including production cuts and minimizing the variety of designs it produces from 69 to less than 55 designs.

“The company will … reduce fixed costs by rationalizing its production capacity, global product range and expenses,” it stated in a declaration, with strategies to “right-size” Nissan’s production capability by 20% to 5.4 million systems a year.

The strategy, it stated, was to attain “sustainable growth, financial stability and profitability by the end of fiscal-year 2023” and would “shift the company’s strategy from its past focus on inflated expansion.”

As part of production cuts, Nissan stated it would close its plant in Barcelona from December, with the loss of 2,800 tasks, in order to “restructure, reduce costs and improve efficiency.” It cautioned today that its plant in Sunderland, the biggest vehicle production plant in the U.K. would end up being “unsustainable” if the U.K. left the EU without a trade offer.

Also recently, Nissan, in addition to its partners Renault and Mitsubishi, revealed a brand-new company design “to enhance the competitiveness and profitability of the three partner companies” with each manufacturer concentrating on specific markets.

Against this background of improvement in unpredictable times, Nissan’s CEO Makoto Uchida spoke with CNBC on Wednesday on a wide variety of subjects, from Brexit to the alliance, and the restoring of financier trust after the prominent, questionable departure of previous CEO and Chairman Carlos Ghosn. 

Here are 5 highlights from CNBC’s Julianna Tatelbaum’s discussion with Uchida:

“We really need to transform ourselves … I want to emphasize the point that the alliance should be a competitiveness asset for each company, and how we can use those assets to make each company grow is a key point,” Uchida stated.

“When I became CEO, I said that I intend to build the corporate culture where we listen to the customers, dealers and suppliers and the whole wide range of stakeholders in and outside of the organization, this is a culture where different opinions are welcome.”

“Covid-19 has clearly disrupted our industry and (the) automotive group has very much been influenced by this crisis.”

“But first, our priorities are definitely the human and health care (factors). So how we can make sure our employees and our wider global networks, suppliers partners … safe. This is my first priority and is where the company is focusing on.”

“When we talk about transformation, we need to look back at what went wrong in the past strategy and how we can restore ourselves on a steady growth path.”

“So this is the most important (thing) … one of the areas that we help pursue is that how we can have the right size (for) our production capacity with the efficiency of the operation.”

“We want to have sustainable profit and that we must honestly address on the area of under-performance and pullback from the area that the previous over-expansion that has been done in Nissan.”

“So this means we need to optimize our production at an appropriate level and also the operation while enhancing operational efficiency.”

“We need to cautiously monitor how the (U.K.) government (is) going to make a deal in terms of Brexit, when it comes to the tariff agreement, because this would have a lot of influence in our operation.”

“But again, I would like you to focus and emphasize that we would like to keep up our brand in Europe … So this is what I can say today.”