Nissan's Chief Ghosn to Steer Operations in North America

The Wall Street Journal 03/24/2004

Authors: Arran Scott and Norihiko Shirouzu

(Copyright © 2004, Dow Jones & Company, Inc.)

TOKYO -- Nissan Motor Co. said Chief Executive Carlos Ghosn will take direct charge of its North American operations to guide the Japanese auto maker in a crucial market amid disappointing early sales of some key new models.

Nissan's comeback in the U.S. market continues, with overall vehicle sales -- including its Infiniti G35 sedan and coupe, Murano crossover sport-utility vehicle and Maxima and Altima sedans -- rising 26% from a year earlier in January, 46% in February, and an estimated 35% this month. But the move, announced yesterday in Tokyo, also comes at a time when Nissan is wrestling to correct marketing errors on the edgy Quest minivan and the full-size Armada SUV, two new models critical to the success of massive investments Nissan has made on a big new assembly plant in Mississippi.

One of the biggest challenges Mr. Ghosn faces as he takes direct

responsibility for North America is "to make sure the company delivers on the investment put into the business," said Simon Sproule, vice president of corporate communications for the auto maker's American sales unit. Nissan's business in the U.S., relative to operations in Europe and Japan, has been "the weakest and needed the most investment, so he is focused on paying the first attention" to operations that are key to Nissan's future, he said.

The Brazilian-born Mr. Ghosn, who engineered Nissan's huge comeback from its brush with bankruptcy in the late 1990s, will keep his position as CEO and remain at Nissan headquarters in Tokyo. But he will cede responsibility for Nissan's Japan and China operations as part of a sweeping management shuffle effective April 1. Mr. Ghosn, who has come to the U.S. once every quarter, now will attend every monthly top management meeting for Nissan's North American operations, Nissan officials said.

Executive Vice President Norio Matsumura, who leads the North American business, will take over as head of Japan operations. That move could bolster Mr. Matsumura's chances of becoming Nissan's chief operating officer next year, when Mr. Ghosn becomes CEO of France's Renault SA, which owns a 44.4% stake in Nissan, while remaining CEO of Nissan. Nissan will make an announcement regarding the post of chief operating officer by March 2005.

Mr. Ghosn will hand over management of Nissan's China operations to Senior Vice President Toshiyuki Shiga, who will continue to oversee markets outside Japan, North America and Europe.

Nissan said the management changes were aimed at preparing the company for the launch of its next three-year growth plan, which it will unveil April 26.

Among the challenges Nissan North America faces is jump-starting sales of its Quest minivan, which competes against vehicles such as DaimlerChrysler AG's Dodge Caravan, Honda Motor Co.'s Odyssey and the Toyota Motor Corp.'s Sienna. Since the Quest went on sale last July, sales have averaged about 3,700 vehicles a month, far short of the 6,700 vehicles the company was aiming to sell. Jed Connelly, a senior sales and marketing executive at Nissan's North American sales unit, said the company was "too bullish" for the Quest in a highly competitive segment. Nissan executives said the company also underestimated demand for the top-of-the-line trim of the minivan and demand for expensive optional features such as the big "skyview" sunroof and the rear-seat DVD entertainment system.

To cope, Nissan last month began offering both skyview sunroof and DVD features in a wider range of Quest models, company executives said.

The Nissan Armada SUV, a big truck built to rival Detroit models like the Chevrolet Tahoe, also is underperforming expectations. Mr. Connelly said the Armada, launched last September, is selling at a pace of about 2,800 vehicles a month. Nissan has to sell 3,400 vehicles a month to achieve its goal of selling 40,000 vehicles a year. Mr. Connelly attributes the Armada's problem in part to intense competition in the U.S. full-size SUV segment.

Related articles:

Reshuffle intensifies race for top job at Nissan - Financial Times

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Nissan CEO to take charge in N. America - The Detroit News

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Nissan's Ghosn to lead North American unit - Detroit Free Press

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Nissan CEO to Lead N. American Division - Los Angeles Times

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Nissan makes several executive changes - Oakland Press (Mich.)

03/24/2004

IMHO, Ther can be very little good in this annonceed change for people who appreciate "performance" vehicles and Nissan participation in motorsports.