Nissan CEO Uchida scrambles to revive automaker amid mounting challenges

Nissan’s slide in sales puts its CEO Makoto Uchida in a race to stabilise the struggling automaker, which is bracing for declining sales and surging competition plus internal dissatisfaction. Sources said Uchida told managers in an October meeting that the business was worsening and sales were slumping in the U.S. and China and that drastic cuts were needed — such as jobs cuts and output slashes.

To address the crisis, Uchida has pledged a sweeping restructuring plan: It announced plans to cut 9,000 jobs, drop global production by 20 per cent, and trim costs by USD 2.6 billion. He also did not get paid half of his salary, as a message that he was going to turn the company around. But that raises questions about Nissan not getting its strategy right.

Strategic Miscalculations

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After the lead, Nissan has fallen behind with the Leaf. When it chose to ignore hybrids—one of the largest growing market segments—and plow forward with nothing but EVs in the U.S, it paid the price. Nissan's failure to capitalise on hybrid demand carried by rivals like Toyota left it reliant on incentives to sales stiff inventory.

While Nissan had its finger on the fast moving proverbial bullet that is electric vehicles with the Ariya, its flagship EV, the production issues and being Japanese prevented it from going after the Tesla Model Y in the U.S. Its hybrid strategy, however, stumbled in China, where futuristic models like the Sylphy haven't taken off with consumers there.

We were not able to predict that hybrid demand would rise so fast, admitted Uchida. Nissan hopes to correct this by bringing out 34 hybrid and EV models by 2030, including a U.S. plug-in hybrid by 2026.

Internal and Market Pressures

Nissan’s strategy may be the jewel, but it’s not the crown of its trouble. Since 2018 when Carlos Ghosn was arrested leadership turmoil has steadily eroded the company’s leadership with notable exits by top executives. Mounting scrutiny is reflected in activist shareholders, including Effissimo Capital and Oasis Management, acquiring stakes.

Chips are also under production cuts in China with closures, and a Mexico joint venture plant could be downsised. Analysts are skeptical but Uchida is resolute. “This is a failure of management strategy,” said Seiji Sugiura of Tokai Tokyo Intelligence Laboratory.

As Nissan battles plunging sales — down 40% since 2017 — and a battered stock price, the next few months will be critical for Uchida’s leadership and the company’s survival. “I am determined to fulfill my duty as CEO,” he stated, but doubts linger.