“I see a really strong recovery”

• Ponz Pandikuthira, chief planning officer of Nissan Americas, sees strong momentum because it refreshes its portfolio
• Nissan has redesigned profitable QX80 and Armada, sees good demand for entry Kicks
  
• “There is no way we’ll run out of money in 12 months,” Pandikuthira said

The headlines suggest Nissan is in trouble. Cutting 9,000 jobs, slashing 20% of worldwide production, questioning how for much longer the Japanese brand can last.

Despite all this, Ponz Pandikuthira, the chief planning officer of Nissan Americas, finds plenty to be optimistic about as Nissan regroups yet again.

“I see a really strong recovery,” Pandikuthira told Motor Authority during a phone call last month. 

If proven correct, it would not be the primary time Nissan emerged from dire straits. In 1999, the scrappy Japanese company once known for sports cars and revolutionary engineering, avoided bankruptcy by joining the Renault-Nissan alliance helmed by incoming CEO and subsequent cause célèbre Carlos Ghosn. The businessman cut costs and slashed jobs en path to a record 8% market share within the U.S.—and weird celebrity fame.

Then he was arrested for financial misdeed in 2018, fled Japan in a music-equipment box in 2019 to his home country of Lebanon, where he couldn’t be extradited to Japan or France for his alleged crimes. Nissan has been in a tailspin of sensationalism ever since. 

Change is coming at Nissan, nevertheless, and its manifest within the brand’s latest products. Our call took place in a mobile boardroom, inside the luxurious 2025 Infiniti QX80 full-size SUV, redesigned for the primary time in about 15 years. 

Pandikuthira had been called away in the course of the drive program of the redesigned 2025 Nissan Armada three-row full-size SUV and 2025 Nissan Murano midsize SUV. It was mid-December, outside of Nissan’s North American headquarters in Franklin, Tenn., a number of days before a bombshell announcement that Honda and Nissan were escalating talks of a merger to be finalized by 2026. 

Loads more is planned for the Americas, which together makes up about 30% of worldwide Nissan sales and is probably the most profitable region for the brand, accounting for “the lion’s share” of profit, Pandikuthira said. 

In our Q&A, Pandikuthira debunked among the negative news and solid light on what’s coming for a storied brand that is now greater than 110 years old, including its origins as Datsun. 

What are Nissan’s strengths without delay?

Pandikuthira: “I’ve been within the automotive industry for 28 years and it’s so cyclical. The performance of an organization—if it’s a snapshot of 1 instance of time—it’s not representative. An lively plan that’s in place for the longer term, a three-year operational plan for which we’re deploying capital without delay is a more accurate picture of the business.

“We’ve got 4 latest cars this 12 months, we replaced the Murano which has 1.1 million units sold (lifetime, global since 2003 model 12 months, primarily in North America) in a distinct segment segment Nissan defined. We’re replacing two of probably the most per unit profitable vehicles worldwide within the QX80 and Armada (Patrol). And we’ve replaced our entry level vehicles—the access point into the brand for the region—the Kicks, which is now the fastest turning product we’ve had in our recent past. Customer demand is excellent, they spend little or no time on lots.

“That’s very strong momentum for where we’re. And where we’re headed is to proceed to replenish this platform and the portfolio, compensating for among the shortfalls we’ve now. We’re going to be adding a PHEV by the tip of 2025. We’ve reinvested in deploying the next-generation Rogue that can include hybrid, PHEV, and inexpensive ICE (internal combustion engine) powertrains—that can be a solid over-200,000-unit program. And we’re coming out with 4 different EVs.

“As for the timeline, I can’t comment on specifics without delay but they’re actively being worked on. We’re not betting on all-electric for our entire platform—the market has spoken—it’s going to be a mixture of ICE, partially electrified hybrids, PHEVs, and we could have EVs.”

Ponz Pandikuthira, chief planning officer of Nissan Americas

Where do you see Nissan needs work? More specifically, is Nissan fully past the Carlos Ghosn era?

“Let’s talk first in regards to the Carlos Ghosn query because it’s a critical one. Under normal circumstances it could take about two years to wash up the aftermath of that reputational impact. But, unfortunately, for several different reasons not price delving into at this point, we’ve had about two to 3 rounds of major management level changes. (Current Nissan CEO Makoto Uchida took over in late 2019, after Hiroto Saikawa was ousted in lower than two years.)

“That instability has delayed the recovery. Once I say delay the recovery it’s not by way of what needed to be cleaned up fiscally and legally but from a strategic decision-making standpoint. Each level of senior management has a certain vision for a way the portfolio should look, where we must always invest, where we must always move, and if that changes in two rounds that’s what’s slowed us down from reacting far more quickly to do the stuff we’d like to do available in the market.

“I do consider now we’re able of stability.

“Coming to your second query of what Nissan really must deal with. I believe we’ve an outstanding portfolio coming. We do have cost challenges which are literally related to scale. The Renault-Nissan alliance had lots of platform synergies with huge cost benefits. And the discussions we’ve had with Honda (and there’s numerous very intense discussion occurring without delay) to see how that partnership with Honda can deliver software defined vehicles, efficient EVs in the longer term, battery technologies, powertrains, I believe that can address among the cost challenges we currently have.”

Ponz Pandikuthira, chief planning officer of Nissan Americas

Job cuts, production cuts, long-term survival—what would you say to those sensational headlines or to speculation on Nissan’s future? What is absolutely occurring?

“Those are particularly reasonable questions and I’m going to reply them directly. And I would like to deal with them separately. If there’s dodging around it’s because individuals are nervous to talk out and I believe that makes it worse.”

The primary one in regards to the 9,000 jobs:

“Why 9,000 jobs? You’ve seen our global footprint and the variety of employees we’ve. We were an organization selling 5.9 million cars at a peak (from peak 12 months of 2017 after we were shooting for 8% market share Ghosn goal. It’s been a comparatively regular downslide for the reason that scandal broke) and now we’re right down to 3.5 million cars. It probably shouldn’t have been that steep, I don’t think it is a 3.5-million-unit company but while you delay key decisions…This business has a two- to three-year development cycle to get latest product to market and so yearly or two years you lose in decision-making the upside in profitability that those products would have generated also get delayed.

“Once you’re selling that many fewer vehicles, it’s just general fiscal responsibility that claims you’ve got a value footprint that does not match the revenue footprint. So it is a fundamental rightsizing of the business. It has nothing to do with gloom and doom, it has nothing to do with desperation. It’s just fiscal responsibility that any for-profit company has to do.

“The best way we’re going in regards to the 9,000-job reduction is planned and I believe it’s done in a really humane way. We’ve had a voluntary separation plan here within the U.S. We’re not only brutally axing jobs and individuals are well aware of it. We’ve contingency plans. That’s normal rightsizing of the business.

“I do see a really strong recovery. Here within the Americas region I do expect us to be up above the 1-million mark (in annual sales).”

About Nissan’s production cuts and the China issue:

“On to the China business. It’s no surprise that China’s annual volume of 23-25 million cars, depending on the 12 months, was strongly dominated by joint-venture partners with foreign brands. That has dropped off dramatically during Covid years and after. That’s been driven by domestic Chinese competition being superb. I’ve been there and done lots of benchmarking work with extremely good products with a highly competitive cost base. They’re much more cost-effective for the local Chinese customers.

“All joint-venture corporations are being resized, not only Nissan. We’re readjusting that business to have a China-for-China strategy working with our joint-venture partner in China to develop local products using local supply base, local technology, local design and making a far more relevant product for the Chinese market. That’s really our China Recovery Program which, yes, we’ve seen a drop in volume. There can be a down phase after which we’ll get better because we’ll be doing the correct thing in China for the Chinese customer.”

As for the running out of money query:

“What someone took was a quarterly or monthly cash-burn number and said at this rate of money burn for that exact snapshot in time when you proceed that for the following 12 months you’ll run out of your net money…that’s completely flawed math.

“I’m converting yen to U.S. dollars to make it relevant for this discussion. For example we’ve $9 billon in net money, which means money sitting in a bank that you may have access to. In the event you’re burning through $1 billion per 30 days you’ll run out of money in nine months. But we’re not burning through $1 billion per 30 days. Our net free money flow positions for this financial 12 months is zero. So, yes, we’re not generating latest free money, but we’re not eating into the $9 billion. So starting the following financial 12 months, which we’ll in April, we still have access to $9 billion and we’re generating more free money flow.

“And the forecast for the following 12 months, subject to performance of the vehicles, is to have positive free money flow for the next 12 months. Which suggests you don’t burn through any of the $9 billion and also you’re self-sustaining your day-to-day operations and all of the capital investments you may have to make going forward. It is a huge sum of money, because we’re retuning all these EVs, we’re bringing in latest hybrids, we’re bringing in latest products, we just launched 4 latest products, so we’re not sitting idle on the product investment standpoint.

“There’s no way we’re going to expire of money in 12 months. It’s just basic math of the business and publicly available data.

“There’s one additional element. We’ve a really large financing business, which provides us access to an entire other pool of money incremental to the $9 billion. In the event you have a look at all these numbers, there’s no liquidity crisis by any means. Now If Nissan starts publishing numbers on a monthly basis where we’ve negative free cashflow and we’re burning though $1 billion per 30 days with no recovery plan, then we’ve an issue. We aren’t even remotely near that scenario.”

Nissan paid to fly and house Motor Authority for the launch of the 2025 Armada and 2025 Murano.