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March 26, 2017 10:32

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13:21 24 February 2017

FOCUS: Ghosn to focus on steering alliance over bumpy road ahead

TOKYO, Feb. 24, Kyodo

Nissan Motor Co. Chairman and Chief Executive Officer Carlos Ghosn decided to switch his focus to managing the company's alliance with Renault SA and Mitsubishi Motors Corp. as political challenges mount in the U.S. and European markets.

Ghosn, also serving as chairman and CEO of Renault and chairman of Mitsubishi Motors, is aiming to expand the world's fourth largest automaker alliance after Germany's Volkswagen AG, Toyota Motor Corp. and General Motors Co.

After stepping down as Nissan CEO, he will remain as chairman to oversee Japan's second-largest automaker while Hiroto Saikawa will take over as CEO from April, a position he currently shares with Ghosn.

Ghosn's global expansion drive is likely to face challenges from U.S. President Donald Trump's protectionist trade policies and Britain's decision to leave the European Union. Nissan has major research and production bases in Britain.

With Ghosn serving as Nissan's chief for nearly 17 years, speculation has grown about his successor.

While Ghosn did not hold a news conference following the announcement, he said in a statement, "I am confident that the management team I have developed at Nissan over the past 18 years has the talent and experience to meet the company's operational and strategic goals."

Before Ghosn assumed the post of chairman at Mitsubishi Motors in December, he had already laid the foundation for a management shake-up by promoting Chief Competitive Officer and Vice Chairman Saikawa to co-CEO in November. Saikawa retained the post of vice chairman.

With the global sales volume of the Nissan-Renault-Mitsubishi alliance approaching the 10 million threshold, Ghosn is widely seen in the industry as trying to secure the world's No. 3 spot by leading a revitalization of Mitsubishi Motors in the wake of its fuel economy manipulation scandal.

Takaki Nakanishi of automotive industry research and consulting firm Nakanishi Research Institute Co. said Ghosn will likely continue to be in charge of the group operations. "Nothing is going to change very much" in the management of the alliance, Nakanishi said.

At 45, Ghosn moved to Nissan in 1999 to work as chief operating officer and lead the carmaker's turnaround under a capital alliance with Renault. Already known as the "cost cutter" at Renault, he spearheaded a recovery by closing down five money-losing plants and cutting the workforce by more than 200,000 in the initial stage of his business revival plan, moves unprecedented in Japan's manufacturing sector.

His management style stood out as he set numerical "commitment" targets and carried out aggressive reforms.

Under his tenure, Nissan moved away from conventional practices in the Japanese auto industry. For instance, Nissan aggressively negotiated with steelmakers to lower steel sheet purchase costs, triggering fierce competition among major steel companies.

Toyota Motor Corp. President Akio Toyoda told reporters Thursday he expects further contributions from Ghosn "for the sake of the auto industry."

Chief Cabinet Secretary Yoshihide Suga said at a press conference he hopes Nissan's latest management change will "accelerate moves to enhance the competitiveness of the Japanese car industry."

The remark by the top government spokesman came at a time when Japanese automakers, major manufacturers accounting for a large portion of Japan's exports, are under pressure to review their North American operations after Trump criticized Japan's automobile trade practices as "not fair" and threatened to impose a border tax on imports such as cars made in Mexico and elsewhere.

The uncertain U.S. business outlook poses the biggest risk for Nissan with Trump vowing to renegotiate the North American Free Trade Agreement with Canada and Mexico.

Nissan's output in Mexico is the largest among Japanese automakers, producing more than 800,000 cars a year and exporting roughly 300,000 of them to the United States.

Trump's border tax would be a significant blow to not only its existing Mexican operation but the Nissan-Renault alliance's joint production in the country with Germany's Daimler AG, slated to begin later this year.

In Britain, Nissan produces roughly 480,000 units annually and exports roughly 80 percent of that number to markets including European Union member states. But Britain's impending departure from the economic bloc could affect the tariff advantages the company currently enjoys.

==Kyodo

  • Nissan's Ghosn speaks to reporters at North American auto show
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