Nissan plans CEO change amid mounting losses and failed Honda talks
Nissan considers replacing CEO amid mounting losses and strategic uncertainty
Nissan Motor Co. is exploring options to replace its CEO, Makoto Uchida, following a series of financial setbacks and the collapse of merger talks with Honda Motor Co.
The company’s board is reportedly evaluating potential candidates to succeed Uchida, who has served as CEO since late 2019. Despite these leadership discussions, Nissan’s stock rose as much as 4.9% in Tokyo, signaling market optimism that the company can still secure a strategic partnership to stabilize its future, reports Bloomberg.
Financial Struggles and Deteriorating Outlook
Uchida, 58, warned earlier this month that Nissan would incur a net loss of ¥80 billion ($536 million) for the fiscal year ending in March, a stark contrast to the ¥380 billion net profit he had forecasted just nine months ago. The company is also facing a mounting debt bill, with all three major credit agencies recently downgrading Nissan’s ratings to junk status.
As part of his efforts to strengthen the company, Uchida attempted to negotiate a merger with Honda late last year. However, the discussions fell apart earlier this month over disagreements on the structure of the deal.
Despite the setback, Uchida emphasized the importance of strategic partnerships for Nissan’s future, especially in the electric vehicle (EV) sector. Nissan, Honda, and Mitsubishi Motors Corp. will continue collaborating on EV batteries and software development.
Uncertain Future and External Interest
Nissan is struggling to attract consumers, with an outdated product lineup and heavy reliance on costly incentives to manage inventory. In November, Uchida announced plans to cut 9,000 jobs and reduce production capacity by 20%.
The company’s largest shareholder, Renault SA, has expressed concerns over Nissan’s direction and recently indicated that China’s Zhejiang Geely Holding Group may be a more suitable partner moving forward.
Meanwhile, Taiwanese company Foxconn, known for its role in iPhone production, approached Nissan in December about acquiring a stake in the company and has also shown interest in buying Renault’s 36% shareholding. Additionally, US private equity firm KKR & Co. has explored potential investments in Nissan to improve its financial position.
Additionally, Honda Motor is open to resuming merger negotiations with Nissan Motor—potentially forming the world’s fourth-largest automaker—but only if Nissan CEO Makoto Uchida steps down.
