Business Management

Internal Assessment

Standard Level

Should Nissan strengthen its alliance with Renault and Mitsubishi

in order to overcome the current crisis?

Student: Bruno Domper Fredianelli

Candidate Code: hzk238

Word Count: 1510

Date: 21 September 2020

Table of contents

Introduction ---------------------------------------------------------------------------------------------------------------- 3

SWOT Analysis for Nissan ---------------------------------------------------------------------------------------------- 4

Ansoff Matrix for Nissan ------------------------------------------------------------------------------------------------ 6

Internal Growth ----------------------------------------------------------------------------------------------------------- 8

Conclusion ----------------------------------------------------------------------------------------------------------------- 10

Bibliography ---------------------------------------------------------------------------------------------------------------- 11

Supporting document 1 ------------------------------------------------------------------------------------------------ 14

Supporting document 2 ----------------------------------------------------------------------------------------------- 17

Supporting document 3 ----------------------------------------------------------------------------------------------- 22

Supporting document 4 ---------------------------------------------------------------------------------------------- 24

Domper Fredianelli hzk238

INTRODUCTION:

Nissan Motor Co. LTD is a Japanese multinational automobile manufacturer

created in 1933. It founded its headquarters in Nishi-Ku, Yokohama 1. Nissan has been

involved in a strategical alliance with Renault since 1999. In 2016 Mitsubishi was added

to the alliance after Nissan’s ex CEO Carlos Ghosn had seen an opportunity on the

lowered share prices due to a current crisis Mitsubishi was facing and bought 34% of it.

(SD 2)

In the last years Nissan has entered a financial crisis 2. The company was

somewhat adrift and the relationship with Renault was too. After the CEO post Ghosn

era had foregone, Makoto Uchida assumed as the new executive director 3 and saw, on

the critical situation of financial loss and the recent Covid-19 virus emerging as a real

threat to its economic results, an opportunity of enforcing the alliance. A Transformation

Plan4 was presented in order to carry out the “alliance project” throughout the world.

(SDs 2, 3, 4)

Rounding this issue, Should Nissan strengthen its alliance with Renault and

Mitsubishi in order to overcome the current crisis?

1
Data taken from Nissan´s international webpage.
2
which was caused, among other things, by the imprisonment for fraud of Carlos Ghosh.
3
was previously disposed on charges which were aimed to increase Nissan-Renault synergy’s
4
ruled by shortages in many direct and indirect financial aspects

3
Domper Fredianelli hzk238

SWOT analysis for Nissan in the alliance

SWOT (strengths, weaknesses, opportunities, and threats) analysis is a

framework used to evaluate a company's competitive position and to develop strategic

planning. SWOT analysis assesses internal and external factors, as well as current and

future potential. It is designed to facilitate a realistic, fact-based, data-driven look at the

strengths and weaknesses of an organization, its initiatives, or an industry. The

organization needs to keep the analysis accurate by avoiding pre-conceived beliefs or

gray areas and instead focusing on real-life contexts. Companies should use it as a

guide and not necessarily as a prescription. (Grant, 2020)

Strengths: Beyond the alliance, Nissan's main positive internal factors are; its

recognition and global value5. Furthermore, Nissan has a high research and

development expenditure, which has enabled Nissan to improve and specialize its

products on the basis of the safety of its clients, in turn environmental care and the

production of vehicles operating on electrical and hybrid technologies. In addition, it is

constantly evolving to originate vehicles with more advanced and future technologies.

What’s more, within its brand portfolio Nissan does not depend on a sector or segment.

Contrary to this, it has developed products in passenger cars, zero emission vehicles,

pacts, wagon sedan, SUV6, mini wagons, cross-car, luxury cars, vans and light

commercial vehicles. They also sell marine products, such as motor boats, engines,

pontons, cleaning boats and cruisers. Besides, referring to the company’s geographical

presence, it has manufactured in 20 countries and marketed in more than 170 countries

in the world, being their central markets North America, Japan, China, Mexico and the
5
(with an estimated brand value of around $17,785 billion, occupying the seventh place in the highest automobile marks)
6
sports utility vehicles

4
Domper Fredianelli hzk238

Middle East (Bhasin, H). In addition, the company owned 34% of the shares of

Mitsubishi (an alliance member); this allowed it to have a great control over the alliance

managing two of its three members and, therefore, being capable of handling Mitsubishi

to Nissan’s convenience. (SD4)

Weaknesses: Nissan’s main negative internal factors are: the last year’s negative

financial results, which led the company into its current crisis. For instance, operating

profit fell to 54.3 billion yen7 for the three months ended in December, plunging 83%

from the same quarter a year before (SD3) and a decline from 15% to 20% in its total

insurable value compared to the previous year. This was, however, partially attributed to

the pandemic situation8, and also to a 10.6% decrease in sales compared to the

previous year (SD1). Another issue was the damaging of the company’s public image

with 307,962 vehicles under recall in January of 2020 and the Carlos Ghosn

imprisonment in 20189 which did not influence the brand image positively. (SD2)

Opportunities: The main opportunities the company will be facing could be foremost

attributed to the alliance. These are; chances to focus on its core markets such as

Japan, China and North America and face them with their best-known global core model

so as to achieve gradual improvements within its markets. Another interesting

opportunity that is viewed as the future of automobiles, but in Nissan case is rather an

actual fact than a future wish, is the sales expansion of electric vehicles and electric-

motor-driven cars -including E-power-. It’s important to highlight that these aspects are

7
($504 million)
8
COVID-19
9
was the company’s CEO for more than thirteen years.

5
Domper Fredianelli hzk238

possible owing to the alliance statements in which they are willing to share sources

including production, models, and technologies. (SD1)

Threats: The main threats the company might be facing are: above any other menace,

the pandemic situation and its indefinite duration that could seriously affect the post

economic, cultural and political situation, either globally or in any of the countries where

Nissan is focusing, pointing in the economical theme, What’s more, the extensive

competition fomented by the global situation which has led to a current crisis of many

other companies might be a hindrance to the long-term or short-term achievements,

delayed or not met and, therefore, demanding a consistent reaction of the company to

try to carry them out otherwise.

Ansoff matrix

The Ansoff matrix is an analytical tool that helps managers to devise their

product and market growth strategies. It shows the various strategies that a business

can adopt depending on whether it wants to market new or existing products in either

new or existing markets. (Hoang 2018)

There are four existing growth strategies in the Ansoff matrix: market penetration,

based on introducing existing products into existing markets, Market development,

based on introducing existing products into new markets, Products Development -new

products into existing markets- and diversification (new products into new markets).

(Hoang 2018)

6
Domper Fredianelli hzk238

Nissan will be applying the Market Penetration strategy to ensure steady growth.

Therefore, by the appliance of this strategy, Nissan expects to enhance the quality of

its business, while maintaining financial discipline and focusing on net revenue per unit

to achieve profitability (SD1); this is possible due to the fact that the strategy means low

risk growth possibilities and Nissan did not see convenience getting involved in a risky

strategy. An important consequence of this strategy is the competitors’ reaction; Nissan

should be aware of and prepare for aggressive techniques, such as price wars, in the

detriments of business profits. Besides being prepared, effective advertising to enhance

the desirability of the product or the offer of more competitive prices would increase the

success probabilities of the company’s proposals.

However, this general market penetration does not mean the automobile

manufacturer will be unproductive on new vehicle models during this new stage faced

by the company. Although its strategy will in general terms imply a market penetration

strategy, 12 models are planned to be introduced in the next 18 months and specifically

in Japan, two more electric vehicles and four more e-POWER vehicles aiming to

increase electrification ratio to 60% of sales. As this occurred, the strategy could also be

understood as a partial product development. This is a medium-risk growth strategy.

Nonetheless, the number of models they are aiming at could be justified, in the context

of Nissan plans for 2023 and the alliance, as a way of keeping the company’s validity in

the current market. (SD1)

7
Domper Fredianelli hzk238

Internal growth

How will the internal growth be enhanced?

Parallel to the market penetration strategy, it is planned to rationalize the right-wing

production capacity (20% capacity reduction 10) and the stream lining portfolio (reduce

the number of models by 20% by 2023 11), reallocate resources to globally competitive

models, shorten product life cycle 12), and carry out a cutting on the fixed costs (achieve

a 300 billion JPY13 reduction in it by 2020 so in 2023 an investment in core with tighter

control can be held). By doing these things Nissan will be able to increase capital

expenditure, provide overall value for money -customers will tend to look at more than

just price when making purchasing decisions and with the stream lining product portfolio

this could be perfectly fixed. (SD1)

As it will be targeting core markets such as China, Japan and North America 14,

the company will be selling extensively through a more specific area but its production

might be improved owing to the strengthening of the alliance in which it was agreed to

share sources including production, models, and technologies. (SD1)

Nevertheless, all these measures might require that the 20/23 project is on a big

internal restructure which requires time, effort and money. In this case, one of the prices

of this re-organization is the closure of factories such as the Barcelona or Indonesia

10
5.4 million units under normal operation, production line reductions and select facility closures, production utilization
11
from 69 to 55
12
to manage portfolio age < 4 years old
13
Japanese Yen
14
while in Europe, Latin America and ASEAN the alliance will be levering

8
Domper Fredianelli hzk238

plants15 and the optimization of the North America plants by the production by segment

and platform16. (SD1)

15
Many people are left jobless
16
This implies large amounts of money and dedicated time.

9
Domper Fredianelli hzk238

Conclusion:

To conclude, it can be stated, considering all the analyses made to understand if

Nissan alliance could be useful to overcome the current crisis, that beyond its project

within the alliance Nissan should, in order to achieve all its goals and objectives of short

and long term, focus on marketing strategies so as to raise its effectiveness

opportunities in each market. Anyway, the Nissan plan does not admit a large mistake

margin, being at the same time, more conservative than ambitious on its aims. Hence, if

the advertising strategies are well-developed, the success possibilities will be high for

Nissan and, therefore, the alliance would have been almost a full extent success.

10
Domper Fredianelli hzk238

Bibliography:

Supporting documents

Supporting document 1

 Nissan, 2020. Nissan Unveils Transformation Plan To Prioritize Sustainable Growth And

Profitability. [online] Nissan Global Newsroom. Visited 30 June 2020.

https://global.nissannews.com/en/releases/release-293ce8d1ca9dbfc2922d2297c900ebc5-

200528-03-e

Supporting document 2

 Riley, C., 2020. Renault And Nissan Deepen Their Alliance In Bid To Survive The Coronavirus

Crisis. [online] CNN. Visited 30 June 2020.

https://amp-cnn-com.cdn.ampproject.org/v/s/amp.cnn.com/cnn/2020/05/27/business/

renaultnissan-mitsubishialliance/index.html?

amp_js_v=a3&amp_gsa=1&usqp=mq331AQFKAGwASA

%3D#aoh=15907227234222&csi=1&referrer=https%3A%2F%2Fwww.google.com&amp_tf=From

%20%251%24s&ampshare=https%3A%2F%2Fwww.cnn.com

%2F2020%2F05%2F27%2Fbusiness%2Frenault-nissan-mitsubishi-alliance%2Findex.html

Supporting document 3

 Inagaki, S., 2020. Nissan’S Makoto Uchida: Seeking The Right Direction In Times Of Crisis.

[online] Ft.com. Visited 30 June 2020. https://www.ft.com/content/d3df7cf6-742d-11ea-95fe-

fcd274e920ca

Supporting documents 4

 Clime, K. (2020, February 01). Is Mitsubishi Owned by Nissan? Retrieved September 17,
2020, from https://www.motorbiscuit.com/is-mitsubishi-owned-by-nissan/

11
Domper Fredianelli hzk238

Websites

 Euronews, 2020. Nissan Shuts Barcelona Plant As COVID-19 Drives Car Giant

Into The Red. [online] euronews. Visited 30 June 2020.

https://wwweuronews.com.cdn.ampproject.org/v/s/www.euronews.com/amp/

2020/05/28/coronaviruseconomic-fallout-nissan-announces-closure-of-

barcelonaplant?amp_js_v=a3&amp_gsa=1&usqp=mq331AQFKAGwASA

%3D#aoh=15907226090378&csi=1&referrer=https%3A%2F

%2Fwww.google.com&amp_tf=From%20%251%24s&ampshare=https%3A%2F

%2Fwww.euronews.com%2F2020%2F05%2F28%2Fcoronavirus-economic-

fallout-nissan-announces-closure-of-barcelona-plant

 Givens, S., 2020. Renault-Nissan -- Why Not A Proper Merger?. [online] Nikkei

Asian Review. Visited 30 June 2020. https://asia.nikkei.com/Opinion/Renault-

Nissan-Why-not-a-proper-merger

 Hoang, Paul. Business Management. Victoria, Australia: IBID Press, Fourth

Edition, 2018.

 Laurent, L., 2020. The Not-So-Irreversible Renault-Nissan Alliance | The Japan

Times. [online] The Japan Times. Visited 30 June 2020.

https://www.japantimes.co.jp/opinion/2020/01/14/commentary/japan-

commentary/not-irreversible-renault-nissan-alliance/#.XtidOJ5lmdk

 Grant, Mitchell, SWOT Analysis of Nissan. Visited 30 June 2020.

https://www.investopedia.com/terms/s/swot.asp

12
Domper Fredianelli hzk238

 N. and Attwood, J., 2020. Why Renault, Nissan And Mitsubishi Have Gone All-In

On Alliance | Autocar. [online] Autocar. Visited 30 June 2020.

https://www.autocar.co.uk/opinion/industry/why-renault-nissan-and-mitsubishi-

have-gone-all-alliance

 News, A. and Wang, Y., 2020. Nissan Now Officially Owns A Majority Of

Mitsubishi Motors. [online] Driving. Visited 30 June 2020.

https://driving.ca/nissan/auto-news/news/nissan-now-officially-owns-a-majority-

of-mitsubishi-motors

 Nissan, 2020. Nissan Reports First-Quarter Results For Fiscal Year 2019.

[online] Nissan Global Newsroom. Visited 30 June 2020.

https://global.nissannews.com/en/releases/release-

b0788fbad5f7d39c2ecd4f79ec00f7cc-190725-01-e

 Bhasin, H. (2019, February 03). SWOT Analysis of Nissan - Nissan SWOT

analysis. Retrieved September 17, 2020. https://www.marketing91.com/swot-

analysis-nissan/

13
Domper Fredianelli hzk238

Supporting document 1

14
Domper Fredianelli hzk238

Highlights from the document:

Nissan Motor Co., Ltd. today unveiled a four-year plan to achieve
sustainable growth, financial stability and profitability by the end of fiscal-year
2023. The scalable plan, involving cost-rationalization and business optimization,
will shift the company’s strategy from its past focus on inflated expansion.
As part of the four-year plan, Nissan will take decisive action to transform
its business by streamlining unprofitable operations and surplus facilities,
alongside structural reforms. The company will also reduce fixed costs by
rationalizing its production capacity, global product range and expenses. Through
disciplined management, the company will prioritize and invest in business areas
expected to deliver a solid recovery and sustainable growth.
By implementing the plan, Nissan aims to achieve a 5% operating profit
margin and a sustainable global market share of 6% by the end of fiscal year
2023, including proportionate contributions from its 50% equity joint venture in
China.
 Right-sizing Nissan’s production capacity by 20% to 5.4 million units a year under
the assumption of a standard shift operation
 Achieving plant utilization rate above 80%, making operations more profitable 
 Rationalizing the global product line-up by 20% (from 69 to fewer than 55
models)
 Reducing fixed costs by approximately 300 billion yen 
 Intend to close Barcelona plant in Western Europe
 Consolidating North American production around core models
 Closure of manufacturing facility in Indonesia and concentrating on Thailand
plant as single production base in ASEAN
 Alliance partners to share resources, including production, models, and
technologies
  Focusing Nissan’s core operations in the markets of Japan, China and North
America
 Focusing on global core model segments including enhanced C and D segment
vehicles, electric vehicles, sport cars
 Introduce 12 models in the next 18 months
 Expanding presence in EVs and electric-motor-driven cars, including e-POWER,
with more than 1 million electrified sales units expected a year by end of FY23, 
 In Japan, launching two more electric vehicles and four more e-POWER
vehicles, increasing electrification ratio to 60% of sales
 Introducing ProPILOT advanced driver assistance system in more than 20
models in 20 markets, targeting more than 1.5 million units to be equipped with
this system per year by the end of FY23.
 

15
Domper Fredianelli hzk238

16
Domper Fredianelli hzk238

Supporting document 2

Renault and Nissan deepen their alliance in bid to survive

the coronavirus crisis
By Charles Riley, CNN Business

Updated 5:30 AM EDT, Wed May 27, 2020

London(CNN Business)Renault, Nissan and Mitsubishi Motors will make fewer models, share production

facilities and focus on the existing geographic and technological strengths of each carmaker as they try

to slash costs and ride out the coronavirus pandemic.

The world's biggest car-making alliance said Wednesday that it would abandon the growth at all costs

strategy pursued by former boss Carlos Ghosn, whose arrest in 2018 on financial misconduct charges

threw the group into disarray.

17
Domper Fredianelli hzk238

Renault could 'disappear' without government help, French finance minister warns

"The alliance's new model focuses on efficiency and competitiveness rather than on volumes," Jean-

Dominique Senard, the chairman of Renault, told reporters. "Our aim is to increase the competitiveness

and profitability of each of the three companies."

The new strategy will see each alliance member taking the lead in specific geographies while the others

follow. Nissan (NSANF), for example, will lead the way in North America, the Middle East and key

markets in Asia including China and Japan. Renault (RNLSY) will take first position in Europe and South

America, while Mitsubishi has been assigned parts of southeast Asian and Oceania.

The alliance will apply a similar strategy to technology and engineering. Nissan will take the lead on

autonomous driving, while Renault will tackle Android-based connected car technologies. The companies

will also reduce the overall number of models they sell, build more cars on shared platforms and design

them to use more of the same parts. Renault and Nissan are expected to announce job cuts and plant

closures later this week.

The two companies have been partners since 1999, cooperating on strategy and product development

while never taking the plunge and completing a full merger. Together with junior partner Mitsubishi

Motors, the unique alliance employs roughly 450,000 people and in 2018 it sold roughly one in every nine

cars around the world.

The companies have so far largely maintained separate manufacturing facilities. But under the new

strategy, more plants will produce cars for each brand. In Latin America, for example, two factories will

produce Renault and Nissan SUVs.

18
Domper Fredianelli hzk238

An assembly line near Paris that produces both the

electric Renault Zoe and the hybrid Nissan Micra.

The deepening of the commitment marks a major change: As recently as last year, Renault had been

looking outside the alliance to cut costs, holding merger talks with Fiat Chrysler. The Italian-American

company went on to agree to a merger with the owner of Peugeot and Citroen, closing off a potential

avenue for collaboration for Renault.

The departure of Ghosn, who has denied acting improperly, sparked a series of leadership changes at

both carmakers, confusion over their strategy and questions over whether the sputtering relationship had

outlived its usefulness. Nissan and Renault, which are linked through a series of equity stakes, in January

denied reports that they were breaking up.

Then the coronavirus hit, plunging the alliance deeper into crisis and necessitating a sweeping overhaul.

Nissan will reportedly announce this week that it will reduce its global production capacity by 20% and

close a plant in Barcelona. Japanese media reported that Nissan could slash its workforce by 20,000.

Renault could also stop making two models in Spain and move that production to Nissan's massive plant

in England, according to the Financial Times.

Renault and Nissan were already struggling

Renault was in trouble before the pandemic hit. The French carmaker reported its worst financial

performance in a decade last year, with net profit dropping 99% to just €19 million ($21 million). Its share

price has plummeted 69% since the start of 2019.

In April, the company's global sales dropped by nearly 70% compared to the same month last year as the

pandemic slammed Europe and North America. The company halted production at its 12 facilities in

France in the middle of March, resuming operations at most plants only this month.

19
Domper Fredianelli hzk238

There has also been turmoil in the leadership ranks, with Ghosn's immediate successor as CEO, Thierry

Bolloré, being ousted last October in what he denounced as a "coup." Bolloré's successor, Luca de Meo,

doesn't start work until July.

France to inject almost $9 billion into ailing auto industry

France's finance minister, Bruno Le Maire, warned Friday that Renault is in "serious financial difficulty."

"Renault can disappear," he told Europe 1 radio.

The French government owns 15% of Renault, and is currently negotiating the terms of a €5 billion ($5.4

billion) loan for the company. The finance minister said last week that Renault must not close a factory

north of Paris — one of the few facilities that currently produces cars for Nissan.

"We sign when we know what Renault's strategy is," Le Maire told the radio station. The company's plans

must include a transition to more eco-friendly vehicles. "We want Renault to be more productive and to

produce even more of its vehicles, particularly electric, in France," he added.

On Tuesday, French President Emmanuel Macron announced an $8.8 billion aid package for the

country's embattled auto industry. The plan includes big incentives for consumers to buy new cars, with

the government offering subsidies worth more than $7,000 for electric vehicles and $2,000 for a hybrid.

Nissan, which reports financial results for fiscal year 2019 on Thursday, has endured four straight

quarters of declining profits. Operating profit fell to 54.3 billion yen ($504 million) for the three months

ended in December, plunging 83% from the same quarter a year before.

20
Domper Fredianelli hzk238

21
Domper Fredianelli hzk238

Supporting document 3
Nissan’s Makoto Uchida: Seeking the right direction in times of crisis
Shortly after taking over the scandal-hit group, the new boss was dealing with the coronavirus outbreak

Save Kana Inagaki APRIL 5 2020 8

Just weeks after Makoto Uchida was appointed to lead Nissan in early December, news of the
coronavirus outbreak in China reached the Japanese carmaker. His wife and two children were still
based in Wuhan, the early centre of the pandemic that has now killed more than 64,000 people
worldwide. The city is home to the headquarters of Nissan’s joint venture with China’s Dongfeng Motor.
“My employees are my family too, so we wanted to make sure they were safe and treated well. That
comes first,” says the 53-year-old who used to head the company’s operations in China before becoming
chief executive. Mr Uchida says he was also extra careful in how the company communicated its
response to the virus: “We should not be exaggerating the situation or unnecessarily inviting panic mode
or uncertainty among our employees.” Since the outbreak, Nissan has given regular updates and
guidelines to employees on health and safety, and tips on how to stay connected while working virtually
through Zoom or Skype. Mr Uchida and other executives also communicate regularly with HR and line
managers. For both the company and the wider car industry, the lessons drawn from the 2011 Tohoku
earthquake and tsunami proved vital. The detailed list of parts suppliers that had been compiled after
that earlier disaster helped Nissan to figure out which parts were imported from China and where the
shortages might occur, so it could set up back-up plans to produce them elsewhere, according to Mr
Uchida. Recommended AnalysisThe Big Read Jean-Dominique Senard’s fight to rescue the Renault-
Nissan alliance Even so, Nissan, with its heavy reliance on hundreds of components made in China,
became one of the first global carmakers to cut production at home because of a parts shortage. “We
need to make a lot of planning. I still cannot foresee how much impact this uncertainty will have” with
the pandemic now spreading to the US, Europe and elsewhere, says Mr Uchida. Even before Covid-19,
the CEO had enough problems to deal with. The carmaker was facing a serious crisis since the 2018
arrest of its former chairman Carlos Ghosn on financial misconduct charges, which the ex-chair denies.
Losses were building up on tumbling sales worldwide, and its 21-year alliance with France’s Renault had
nearly collapsed. Mr Uchida’s arrival was meant to mark a new start for the company. Instead, his
former boss stole the spotlight as he made an audacious escape from Japan to Lebanon, launching a
public tirade against Nissan executives for plotting to bring him down — a claim strongly disputed by the
company. “People were a bit demotivated. In a way, they were worried about what direction the
company was moving towards,” Mr Uchida says. Now, Nissan’s plants located all over the world have
been temporarily shut down because of the lockdown of cities and supply chain disruptions caused by
the spread of coronavirus, triggering a two-notch downgrade of its debt by rating agency Moody’s to
just above junk territory. Shares in the company have nearly halved this year. Still, in a message to
employees at the start of the new financial year on April 1, Mr Uchida said: “We will have to endure
inconvenience and uncertainty for some time. However, we can definitely weather the storm.” As he
started the role of CEO, he placed top priority on visiting the gemba — the factory floors and design
centres in Japan, the US and Europe — where he held town hall meetings with employees. Staff asked
their new boss how they could help the management to repair the Nissan brand. “Our individual
capability is much higher than what we are delivering today,” Mr Uchida says. “It’s my job and the
management’s job . . . to move the company in the right direction.” As part of efforts to rebuild its

22
Domper Fredianelli hzk238

brand, Mr Uchida has talked often about the new “Nissan Way” with employees, saying the group’s
corporate culture needs to be transformed to put an even bigger emphasis on customer needs in each
market. “If you take it seriously and act proactively, I believe that Nissan’s future will be brighter,” Mr
Uchida said in a message to employees in February. Recommended FT Magazine The downfall of Carlos
Ghosn Restoring that direction will entail pain, Mr Uchida says. Following years of aggressively pursuing
a higher market share and sales volume during the Ghosn era, the company has shifted its focus to
profitability. But that has meant Nissan will be concentrating more on areas where it is strong and
withdrawing from markets where its position is lagging. The division of roles within the alliance, which
also includes Mitsubishi Motors, will be more explicit, with each partner taking the lead in markets and
technologies where it has an edge. Under his predecessor, the carmaker had outlined plans to cut
12,500 jobs, but the rapid deterioration in business conditions and plant shutdowns caused by Covid-19
mean there will be many more jobs lost. “We may need to rightsize more dramatically,” Mr Uchida says,
without elaborating on the details. Mr Uchida is an outlier among Japanese executives inside Nissan,
who have mostly stayed at the company since graduating. He spent many years of his childhood outside
of Japan as his father, who worked at an airline, was posted to places such as Egypt and Malaysia.
“That’s where I found the diversity, culture and adaptability to different circumstances,” he says. After
studying theology, Mr Uchida spent more than a decade at a trading house now known as Sojitz. His first
experience with the automotive industry was during the five and a half years he spent in the Philippines,
where the trading house had a joint venture with Mitsubishi Motors. He then joined Nissan in 2003,
starting in the purchasing division before being assigned roles in South Korea and later in China. The
multicultural experience was one of the key factors why the company’s nomination committee selected
Mr Uchida as its new CEO to lead during a period of uncertainty and tension within the alliance.
Following two decades of one-man leadership under Mr Ghosn, Nissan is experimenting with a troika
management team that also includes Ashwani Gupta, who is now the chief operating officer. The
approach is untested, and critics say it makes it unclear who is actually leading the company. But Mr
Uchida says: “If we set the right direction, I think this company has a lot of strength to revive itself.”
Three questions for Makoto Uchida Who is your leadership hero? I don’t really have one but six years
ago, I listened to a Japanese lecturer from a different industry on leadership. There is one thing he said
which is still with me, and which I try to do everyday. He said: “Leadership means how much you can
open your capacity to listen to people”. Every morning, I try to ask myself, am I opening my capacity to
listen to people? If we start ignoring listening to our people, that would cause mismanagement. I am not
managing to do it perfectly but I think this is important. If you were not a CEO/leader, what would you
be? I would be doing totally different things. I wanted to be a chef. I love eating. I like cooking. I like
people saying it’s delicious. If you do the effort, the outcome is there when it comes to food. The result
is always promising as long as you do it the right way. It’s more or less the same with business. If you do
it the right way, the result always comes. What was the first leadership lesson you learnt? In Nissan, it
was definitely diversity. This is the reason why I have to remind myself that trust, transparency and
respect is very important. In the beginning when I joined (the alliance with Renault), it was very
challenging because even the English is different. There is the French way of English. For example, they
always say global and global in French English means holistic. In Japanese English, when you say
“basically yes”, that means no. We have different cultures in the alliance, which is also very beautiful.
Whether it’s working with French, Japanese or Americans, every single kind of lesson gives you the
flexibility to work under diverse circumstances.

23
Domper Fredianelli hzk238

Supporting Document 4

Is Mitsubishi Owned by
Nissan?
by Katie Climeon February 1, 2020

It’s no secret that the Mitsubishi car company was in serious trouble back in 2015. Although it was turning
a profit, Mitsubishi was racked with scandal internationally for exaggerating the fuel economy of one of
its more popular cars for decades. The result was a loss of over a $1 billion in 2016 and a mighty fall for
the once-proud Japanese company. At that point, Mitsubishi’s woes required the aid of one of the
biggest car companies in the world, Nissan.

The history of Mitsubishi Motors

The history of Mitsubishi goes all the way back to 1817 when it started as a shipping and trading
business. That morphed into Mitsubishi Heavy Industries (MHI) in 1934, a company that specialized in
everything from shipbuilding to World War II aircraft. Flash-forward to the twentieth century when
Mitsubishi Motors Corporation became a wholly-owned subsidiary of MHI in 1970.
Part of the new company’s early strategy was to form relationships with established car companies
outside of Japan. First on the list was Chrysler, who purchased 15% of Mitsubishi Motor Corp. in 1971.
The company began cranking out 500,000 cars by 1973, mostly Mitsubishi-built cars that Chrysler
marketed in the U.S. like the Plymouth Arrow and the Dodge Colt. 
Mitsubishi entered the U.S. market under its own name in 1982 with such forgettable models as the
Starion, the Cordia, and the Tredia. A vehicle everyone is familiar with came soon after, the Mitsubishi
Montero, also known worldwide as the Pajero and the Shogun. This simple yet sophisticated SUV had true
off-road capabilities and was manufactured for a loyal following for decades up until 2006.

Scandal rocks Mitsubishi

The car company is no stranger to scandal. Back in the ’70s stacks of customer complaints that should
have been reported to the government were found in an employee’s locker. While investigating, the
Japanese government wound up forcing Mitsubishi to recall 620,000 secretly defective cars and trucks.
More recently in 2016, scandal once again rocked Mitsubishi. It turned out they were faking the data about
the fuel economy for the Kei, an ultralight micro-cars sold in Japan. These types of tiny cars are rarely
seen in the U.S. but represent about 40% of Japanese car sales. The scandal over the faked data caused
Mitsubishi’s share prices to plunge.

24
Domper Fredianelli hzk238

Nissan’s stake in the company

On May 12, 2016, Nissan spent $2.2 billion to buy a 34% controlling share in Mitsubishi Motors
Corporation. The resulting company became known as the Renault-Nissan-Mitsubishi Alliance.
It was a shrewd move by CEO Carlos Ghosn, who picked up the shares at half price after the scandal
broke. However, the decision left many experts scratching their heads over what Nissan could gain by
acquiring the struggling company. 
Mitsubishi’s chairman Osamu Masuko stated the alliance was necessary to respond to fast-moving changes
within the auto industry, such as new technology. Joining with Nissan and Renault helps the company
share investments and cut costs, resulting in a better product. 
The concept for the car company moving forward is “small but beautiful”, meaning despite being one of
the smallest players in the car business, it aims to be a profitable one. 
At the time of the alliance in 2016, Mitsubishi was strong in plug-in hybrids, and Nissan was developing
its electric vehicles. This knowledge came together to create the Nissan Leaf, a highway-capable, all-
electric, plug-in car that is the best-selling car of its kind in the world.
However, only two years into the alliance, Mitsubishi once again faced scandal. This time, chairman
and CEO Carlos Ghosn was arrested, imprisoned, escaped, and fled to his home country of Lebanon in a
wild tale of misappropriation of funds and international intrigue. Since then, analysts have questioned the
Renault-Nissan-Mitsubishi alliance’s long-term existence. 

25