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The disappearance of Carlos Ghosn as president of Nissan Motor Co shows that the Japanese automaker is seeking to reorganize itself to better cope with a rapidly changing market environment, breaking for nearly two decades under its style of charismatic leadership, according to some analysts.
The search for volume and cost sharing was an important part of Ghosn's commercial strategy for one of the most successful automotive partnerships in the world – the alliance between Nissan, Renault SA and Mitsubishi Motors Corp. – led by the leader born in Brazil.
Nissan officials announced their intention to maintain the alliance because of its benefits, even as the company's board of directors approved Thursday the dismissal of Mr. Ghosn to the presidency following his arrest. for alleged financial misconduct.
Ghosn, sent in 1999 by Nissan's parent company, Renault, shut down factories, cut thousands of jobs and streamlined its supply chain in order to get the Japanese automaker out of business.
It has set noble targets for boosting Nissan's growth. As a result, the Japan-Japan alliance he has forged to achieve greater economies of scale has become one of the largest automotive groups in the world.
But there is no guarantee that this approach will remain an engine of growth at a critical moment when the automotive sector will face technological upheavals and consumer demand, analysts say.
Scaling up and keeping costs down through partnerships remains essential, but a strong CEO can no longer single-handedly oversee increasingly diverse operations ranging from traditional car manufacturing to the development of innovative technologies. cutting edge for artificial intelligence and wireless, through services using autonomous vehicles.
Volkswagen AG, Toyota Motor Corp and other global automakers are redoubling their efforts and investing in the launch of next-generation vehicles, with a focus on autonomous cars, Internet-connected vehicles and electric vehicles. Competition is intensifying with newcomers such as Uber Technologies Inc., Google Alphabet Inc. and Tesla Inc.
With these advanced technologies on standby and customers increasingly considering cars as something to share rather than own, automakers are also responding to the growing demand for sharing and travel management services.
Ghosn's management style was "very effective at a time when automakers were focusing solely on building factories and cars and selling them through dealerships," said Satoshi Nagashima, managing partner ( Japan) of the consulting firm Roland Berger.
"With the departure of Ghosn, who had so much power in his hands, Nissan could change direction to focus more on providing services that meet the preferences of different local consumers in each country and region."
Nissan is left behind leading automakers in car-sharing and self-driving operations, Nagashima added.
Ghosn is accused of under-reporting his compensation of some 5 billion yen ($ 44 million) over five years, up to March 2015, in securities reporting.
Nissan also announced on Monday that its internal investigation, triggered by a whistleblower report, had revealed "serious acts of reprehensible conduct" on the part of Mr. Ghosn, such as "the personal use of the company's assets "and a" deep involvement "of the representative director Greg Kelly in the blame.
Managing Director Hiroto Saikawa strongly criticized the long reign of Ghosn and the concentration of power in his hands after adding the position of General Manager of Renault in 2005. Renault holds a 43.4% stake in Nissan, which in turn holds a 15% stake in the French company has no voting rights.
"The power was overly concentrated in one person," Saikawa said at a press conference at Nissan's headquarters in Yokohama on November 19.
While Nissan is moving ahead without its long-time leader, the company will work to strengthen its governance under the leadership of a new management team and rebuild its tarnished brand image.
"The Ghosn misconduct scandal revealed a serious corporate governance problem at Nissan," said Soichiro Nagai, chief rating analyst at Rating and Investment Information.
Nissan may be feeling the impact of the Ghosn and Kelly arrests on sales, which have recently suffered from the scandal of improper final vehicle inspections at factories in Japan, Nagai said.
"We need to see if appropriate measures will be taken to rebuild governance and strengthen oversight functions," he said.
© KYODO
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