TOKYO - The most anticipated unveiling at this year's Tokyo motor show will not have four wheels. It will be the restructuring plan for Nissan Motor Co.
On October 18, the day before the Tokyo show's first press day, Nissan Chief Operating Officer Carlos Ghosn will disclose his plan for turning Nissan around. It promises to be the show's main media event.
Nissan expects to lose money this fiscal year for the sixth time in seven years. It desperately needs an overhaul. After Renault took a controlling 36.8 percent stake in Nissan, the French carmaker sent Ghosn, known as Le Cost Cutter, to Tokyo.
Ghosn has promised a comprehensive, detailed restructuring plan. So far, he has kept that plan secret. But he has implied that neither tradition nor cultural sensitivities will stand in the way of Nissan's turnaround.
Expect Nissan to sell off its aerospace and defense businesses. It probably will seek another round of 'voluntary' early retirements. And Ghosn's plan will speed up drastically the consolidation of its Japanese dealers, many of which Nissan owns in whole or part. That will mean the closure of numerous outlets in Japan.
Nissan also will have to consolidate slow-selling car lines. This autumn it was scheduled to launch several commercial vans. The number of nameplates will be reduced to better marshal sales and marketing budgets. And even though the newly restyled Cedric/Gloria near-luxury cars are selling well at home, Ghosn may drop the Gloria nameplate and keep only Cedric.
Others that may go: Laurel, Bluebird, Fairlady Z and Skyline.
The most visible action, of course, would be a plant closure. Despite the logic of cutting capacity, though, Nissan has no obvious candidate, no standout aging factory building a poor-selling line of vehicles.
Indeed, one of Nissan's problems is that its plants are too new and too full of efficient equipment.
Still, William Nestuk, Tokyo-based auto analyst for WestLB Securities Pacific Ltd, said: 'If Ghosn is able to close one of Nissan's four major vehicle assembly plants, this would propel Nissan's share price to above 1,000 yen from about 670 yen, or about $6.44 now.'
The biggest change Ghosn could bring, though, would be a new culture of management accountability at Nissan.
In one encounter, Ghosn asked a marketing manager what price he planned to put on a new model. The executive replied with a figure.
Ghosn then asked what annual sales would be at that price. Upon hearing the forecast, Ghosn looked at the manager and told him he expected the marketing department to meet that sales forecast.
It was a simple exchange. But the idea that marketers who set prices and sales targets should then be able to make both figures stick was new to Nissan.