TOKYO (Jiji Press) — Nissan Motor Co. faces a likely decrease in its influence over its French partner، Renault SA، due to its deteriorating performance، The Japan News reported.
Nissan is working out a new business strategy to replace the expansionary policy of ousted Chairman Carlos Ghosn، six months after his first arrest.
Renault، watching carefully for an opportunity to integrate its management with Nissan، is likely to step up its pressure on the partner.
“We couldn’t focus on business، including our partnership with Renault، because the scandal happened suddenly last year،” Nissan President Hiroto Saikawa told a press conference Tuesday، stressing the impact of the alleged financial misconduct by Ghosn.
Just after the arrest of Ghosn، who was the top leader in the alliance، Nissan and Renault confronted each other for leadership. Swamped with work to deal with the aftermath of the scandal، Saikawa could not take measures to address business problems promptly.
Nissan’s domestic sales fell below its target، with its brand image hit by a series of scandals including vehicle inspection misconduct.
Its consolidated net profit in the latest year that ended in March plunged 57 percent from the previous year to ¥319.1 billion. The bottom line is expected to fall further to a 10-year low of ¥170 billion in the current year.
“We pushed ourselves too hard to expand the business. We’ll switch to steady progress،” Saikawa said، resolved to break with Ghosn’s strategy.
Renault Chairman Jean-Dominique Senard has indicated support for Saikawa، saying that Nissan should focus on recovering its performance.
Previously، half of Renault’s earnings came from Nissan، owned 43.4 percent by the French company. Now، Nissan’s weakness pushed down Renault’s bottom line by €56 million in January-March 2019.
Alarmed by this، Renault recently appointed a major Japanese brokerage firm to get advice on business integration with Nissan.
Nissan، which holds 15 percent of Renault’s shares without any voting rights، once regarded itself as “the central pillar of the alliance” because of its significant contribution to Renault’s earnings.Speech