As Carlos Ghosn hands him the CEO title at a much improved, more profitable and increasingly powerful Nissan Motor Co., Hiroto Saikawa will have to tackle several lingering weak points.

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GHOSN'S SUCCESSOR WILL HAVE WORK TO DO

As Carlos Ghosn hands him the CEO title at a much improved, more profitable and increasingly powerful Nissan Motor Co., Hiroto Saikawa will have to tackle several lingering weak points.

27 Febrero 2017

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As Carlos Ghosn hands him the CEO title at a much improved, more profitable and increasingly powerful Nissan Motor Co., Hiroto Saikawa will have to tackle several lingering weak points.

Saikawa, Ghosn's longtime loyal No. 2, has spent 40 years at Nissan in multiple executive roles. The Nissan lifer knows the company is radically improved from the wreck Ghosn parachuted into in 1999. But as Nissan returns to Japanese managerial control for the first time in nearly two decades, Saikawa also knows there is much unfinished business.

• The post-Ghosn Nissan needs to reassert its lead in electric vehicles as rivals are piling into the segment with product innovations.

• Nissan must bolster its flailing Datsun brand to capture opportunities in emerging markets.

• And Nissan must re-energize its pint-sized Infiniti luxury brand, which is still struggling to gain global traction.

Additionally, Saikawa's Nissan must find ways to cooperate with troubled Mitsubishi Motors Corp. without being dragged down by its new partner's problems. And Nissan is still hungry to overcome a seemingly unshakable image as a second-tier player that forces the carmaker to shell out more incentives than rivals.

"Saikawa's biggest job will be cleaning up that mess," said Tatsuo Yoshida, a former Nissan employee who is a senior auto analyst at Sawakami Asset Management Inc. in Tokyo.

No difference

These challenges and others are likely targets for one of Saikawa's first orders of business when he takes control as CEO on April 1: crafting a new midterm business plan to follow the March 31 conclusion of Ghosn's multiyear Power 88 plan. That plan, among other things, zeroed in on lifting Nissan's global market share.

The incoming CEO knows well what still needs fixing because, as Ghosn's longtime right-hand man and Nissan's veteran chief competitive officer, he helped chart the company's course.

Big changes are unlikely right away. Continuity is a key reason Ghosn tapped Saikawa in October as co-CEO, after completing Nissan's purchase of a controlling stake in Mitsubishi.

"There is no difference between what I think and what he thinks," Ghosn said of Saikawa then.

Nor does Ghosn plan to fade completely from the scene.

Ghosn, 62, stays on as chairman, not only of Nissan but of Renault SA and Mitsubishi. Ghosn said his new priority is coordinating high-level strategy among the alliance partners.

But down the road, Nissan's direction could change.

The CEO shuffle brings Ghosn closer to eventual retirement. That is a day many employees dread because his sheer force of will is often credited with holding the alliance together.

And, at 63, Saikawa is even older than Ghosn. When it's Saikawa's time to bow out, his replacement might not be as enamored with Ghosn's strategy or so invested in his legacy.

Promises

Saikawa won Ghosn's trust as the enforcer who helped break the Nissan keiretsu of affiliated suppliers in the early days of the Nissan revival plan. As the point man on purchasing, Saikawa made cost and performance, not cozy relationships, the arbiter of business deals.

Saikawa's appointment makes good on two Ghosn promises:

1. Ghosn often said he did not want his eventual successor to be dual CEO of alliance companies, Renault and Nissan, as Ghosn has been.

Now, Renault, Nissan and Mitsubishi will have their own CEOs. (Ghosn still holds the CEO and chairman titles at Renault.)

2. Ghosn also made clear that he preferred a Japanese successor at Nissan.

That move shouldn't be underestimated. Returning control to a Japanese exec comes amid internal hand-wringing about Nissan's identity, insiders say.

Nissan, Japan's oldest carmaker, is struggling to reclaim a place in the hearts of people in its home country. Nissan long loomed as the country's most iconic and influential carmaker, only to be eclipsed by compatriot competitor Toyota Motor Corp. and then have its national identity watered down by the 1999 bailout by France's Renault.

Saikawa's ascent may be a morale booster for Nissan's Japanese ranks.

Unfinished business

On other promises, however, Ghosn has a history of aiming higher than he can deliver.

His Power 88 midterm business plan wraps up March 31. And it missed the two targets represented by the eights in its title. Nissan is neither on track to reach 8 percent global market share nor an 8 percent operating profit margin.

Saikawa will likely pick up those pieces when drawing his own road map this year.

Ghosn told Automotive News in October that Nissan would drop numerical targets in the upcoming plan, partly because the auto industry is changing so rapidly.

While Power 88 set formidable numerical targets six years out when it was introduced, the next plan will outline numerical goals for no more than three years, but qualitative ones beyond that.

Ghosn also said at the time that the future is so clouded by the promise of autonomous driving, electrification, new mobility and interloping new players that it is too hard to read, even only five years out.

With Power 88 coming to a close, Ghosn said, "the time is right" to step back.

"As Nissan's Chairman, I will continue to supervise and guide the company, both independently and within the Renault-Nissan-Mitsubishi Alliance," Ghosn said in a statement last week. "This planned change will also allow me to devote more time and energy to managing the strategic and operational evolution and expansion of the Alliance and ensuring that all its members benefit from the competitive advantages that its scale will deliver."

Well-oiled machine

Saikawa joined Nissan in 1977 and was chief competitive officer from 2013 to 2016. Before that, his roles included chairman of the management committees of the Americas and Europe and executive vice president of purchasing.

He also was a board member of Renault between 2006 and 2016, and is chairman of the Japan Automobile Manufacturers Association, the country's auto lobby.

Looking ahead, Saikawa must burnish an image that, despite the years of improvements by Ghosn, is overshadowed by Toyota, Honda and Subaru. Saikawa has to stoke the fire at Infiniti and Datsun. He needs to fix Nissan's incentive addiction in North America.

But much remains right at Japan's second-largest automaker, especially relative to its partners. Nissan is robust and competitive, with an operating profit almost twice Renault's. And new partner Mitsubishi is still reeling from a fuel economy testing scandal in Japan.

"Why would Ghosn step down from Nissan? Because it's the well-oiled machine in the alliance. It's the one running best," said Chris Richter, an auto analyst at CLSA Asia-Pacific Markets. "Nissan just doesn't need him as much."

Balancing the alliance

In his years running Nissan, Ghosn not only saved a Japan Inc. flagship, but he turned it into one of the world's biggest auto empires, which now operates leaner, more profitably and with broad access to the green powertrains and autonomous safety technologies that will rule the future.

Along the way, Nissan and Renault switched roles. Nissan's healthy stream of profits helped prop up its French rescuer. Ghosn used Nissan's cash cushion to buy Mitsubishi on the cheap.

In pursuit of ever-bigger scale, Ghosn acquired control of Mitsubishi last year and catapulted the alliance to No. 4 in combined global auto sales, behind Volkswagen, Toyota and General Motors.

Thanks to the addition of Mitsubishi's 934,013 vehicles, the alliance's global volume surged to 9.96 million vehicles in 2016, falling just a hair short of third-place GM.

But Ghosn maintains that any merger between the alliance partners -- or even a major rejiggering of the cross-holdings -- is off the table as long as the French government holds its stake in Renault.

That is partly a nod to Nissan's independence and partly to Saikawa.

Saikawa spearheaded Nissan's 2015 pushback against the French government's move to boost its voting rights in Renault. Nissan worried about interference in its corporate governance because Renault owns 43 percent of Nissan, while Nissan holds only 15 percent of Renault. With Ghosn's intervention, the French government demurred, pledging not to meddle in Nissan's affairs.

As chairman, Ghosn can still protect Nissan, and for good reason.

Aside from profits, Nissan also generates much of the next-generation technology Ghosn is betting the alliance's future on: electrified vehicles and autonomous driving.

Nissan, not Renault, has pioneered the path in both fields.

Saikawa will need to safeguard that cash cow and make sure it keeps giving more milk.

Fuente: Automotive News 

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