TOKYO — As Nissan mounts a new push for U.S. retailers to meet monthly sales objectives, the Japanese parent company is restructuring the North American board of directors to focus on profitability and better communication.
The reworked five-member board will be chaired by Nissan’s global COO, Ashwani Gupta, the man leading the automaker’s performance revival amid a forecast for the company’s biggest-ever operating loss, in the current fiscal year ending March 31.
The move is meant to provide closer oversight, coordination and better communication as Gupta tries to shift Nissan’s long-standing U.S. sales strategy away from chasing volume and toward pursuing profit. The change adds two members from the parent company in Japan and one independent outside director.
The board positions Gupta, 49, an Indian national who has never had a job posting in the U.S., as a key figure in the fate of a market that was traditionally a cash cow for the Japanese carmaker.
“I will make sure NNA is getting all the resources and the support it needs to execute the North America transformation plan,” Gupta told Automotive News last week, referring to Nissan North America. “The priority for me is to get Nissan’s positive free cash flow back as soon as possible.”
In a letter to dealers last week, Mike Colleran, senior vice president for U.S. marketing and sales, said the board is designed to better align the direction of regional operations with headquarters in Japan.
“This new board is designed to accelerate implementation of the strategies that the NNA leadership team develops,” Colleran said in the letter, obtained by Automotive News. “That team, led by the management committee in North America, is responsible for working to help you get the metal and move the metal.”
The revamped North American board of directors will have its first meeting this month after a regional gathering of Nissan’s U.S. dealers, Gupta said.
Other board members will be Jeremie Papin, who was appointed vice chairman of Nissan North America in May, and Christian Vandenhende, Nissan Motor Co.’s chief quality officer and vice chief performance officer. Chris Reed, senior vice president for R&D at Nissan Technical Center North America, will be another director. The fifth member will be an outside director.
It was not immediately clear when the appointments are effective.
Papin will continue as Nissan North America vice chairman and head of the regional management committee. The committee will continue to report to Vandenhende.
Papin will retain responsibility for overall North American business results. Gupta, meanwhile, said he will pay especially close attention to relationships with dealers and suppliers. A top priority, he said, will be achieving the company’s shift to quality sales over quantity sales.
“We have to change the mindset, from volume to value,” Gupta said. “It has to be translated and articulated into the activities. I will supervise how we are going to do this.”
Plans for strengthening the board come as Nissan revives stair-step retail incentives in the U.S., to mixed reaction among dealers. The program financially rewards dealers for hitting specific volume targets.
In his letter, Colleran said no sales objective can satisfy every dealer and that many retailers are positive about the change. Inventory levels are healthier, and retail sales are, too, he said.
But Colleran conceded the program may need fine-tuning.
“Setting the bar correctly is not easy for any organization as you well know. We MUST drive a business that provides the volume and profits required to sustain Nissan and Nissan dealers,” he wrote. “Balance will be the key.”
Nissan has been laboring to rekindle North America as an earnings engine. The U.S. is Nissan’s second-biggest market after China. But the North American business has been dogged by strained dealer relations and sagging profitability — apart from the economic disruption of the coronavirus pandemic — as the company tries to lift the brand image and shift away from costly factory incentives and the heavy use of fleet sales.
Nissan has tried before to break with the volume game, usually with lackluster results.
This time is different, Gupta said, because of better product and more grounded objectives.
Whereas Nissan overextended in the past by chasing an 8 percent global market share, it now targets 6 percent. Nissan achieved 5.8 percent global market share last year, so it’s not a big step up, Gupta noted. Meanwhile, a new wave of products, led by the redesigned Sentra sedan and Rogue crossover, are expected to move the brand higher by retaining more residual value.
“The difference is very simple: discipline,” Gupta said. “When you’re giving teams a realistic objective, then teams are prouder when they overachieve in their results.”
New objectives, he said, don’t just set volume goals. Instead, they try to lay out market share volume milestones that are limited by targets for revenue per vehicle.
Urvaksh Karkaria contributed to this report.