Nissan Finance Chief to Step Down Amid Worsening Troubles

Stephen Ma’s Reported Departure

Nissan’s Chief Financial Officer, Stephen Ma, is reportedly planning to step down, according to Bloomberg. This follows an earlier report suggesting that the automaker has only 12 to 14 months to survive unless it secures a new shareholder.

• Tenure: Ma was promoted to CFO in 2019 and has been with Nissan or its Chinese joint venture, Dongfeng, since 1996.
• Timing: His resignation comes after the departure of former COO Ashwani Gupta in mid-2023, under controversial circumstances involving surveillance allegations.

Nissan’s Mounting Financial Troubles

Nissan’s challenges have been exacerbated by:

1. Declining Sales:
   • Slipping demand in key markets like the US and China.
   • A report from The Financial Times quoted a senior Nissan official saying, “We have 12 or 14 months to survive.”
2. Reduced Profitability:
   • Operating profit for the first half of fiscal year 2024 fell by 303.8 billion yen (~A$3 billion), leaving a modest profit of 32.9 billion yen (~A$334 million).
3. Job Cuts and Production Reductions:
   • Nissan plans to cut global production by 20% and eliminate 9,000 jobs to stabilize operations.
4. Stock Value Decline:
   • Shares have dropped 36% over the past year, reaching their lowest since the COVID-19 pandemic.

Renault-Nissan Alliance Uncertainties

The historic 25-year alliance between Renault and Nissan faces uncertainty:

• Renault Stake Reduction: Renault reduced its holding from 43.4% to under 36% in 2023 and is reportedly open to selling more shares, potentially to Honda.
• Search for Stability: Nissan is seeking a long-term shareholder, such as a bank or insurance group, to ensure financial stability.

Leadership Response to Crisis

CEO Makoto Uchida has taken symbolic measures in response to Nissan’s struggles:

• Announced a 50% voluntary pay cut for himself.
• Other executive committee members have also agreed to pay reductions.

External Challenges: Tariffs and Trade Threats

Incoming US President Donald Trump has proposed a 25% tariff on imports from Canada and Mexico. This poses a significant threat to Nissan’s US operations:

• Mexico accounts for a large share of Nissan’s production, with over 300,000 vehicles exported to the US this year.
• Key models like the Versa, Kicks, and Sentra—built in Mexico—face potential cost increases that could impact competitiveness.

Conclusion

Nissan’s financial and operational woes are mounting, with leadership departures, shrinking profits, and external pressures compounding its troubles. The company’s survival hinges on securing new investment and stabilizing its operations during a challenging period for the global automotive industry.

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