Nissan's ousting of its chairman, Carlos Ghosn, for alleged financial irregularities has been interpreted by some analysts as a bid to by the Japanese automaker to prevent a merger with its controlling partner, Renault.
Whatever Nissan's ultimate plans are for the alliance, the drama highlights the fact that Europe is not a happy place for the company right now.
Nissan lost 12.2 billion yen (95 million euros) in the latest quarter in its European region that includes Russia, a big increase from the loss of 2.5 billion yen in the same period last year.
In its most recent financial report, Nissan offered no real insight into the surging European losses, saying only it was dealing with “strict environmental regulations” in the region. That is a reference to the switch to the new WLTP emissions regulations, which has been prolonged and painful for most automakers selling in the EU.
Nissan has shed hundreds of jobs in its key factory in Sunderland, England, as it switched to new powertrains, according to local media reports. Nissan declined to comment directly on the exact number but said changes were related to overhauling the plant to introduce a new engine range.
The fact that Sunderland will soon be outside the EU as the UK prepares to exit the trading bloc is a major headache. Around 80 percent of the plant’s output is exported to mainland Europe.
Nissan's European sales are falling as its model range ages. Sales in the EU and EFTA markets fell 11 percent to 439,288 through October, according to industry association ACEA. Nissan’s market share dropped to 3.3 percent from 3.7 percent.
Delays in offering the Qashqai compact SUV, Nissan’s top-seller in Europe, with a new 1.3-liter turbocharged gasoline were likely to blame, but so too was the waning popularity of outdated Juke small SUV, the automaker’s No. 2 seller. The replacement for this key model in a segment Nissan helped define at launch in 2010 was due this year, but has been delayed.
Meanwhile Nissan has struggled to sell hatchbacks. Earlier this year it killed the Pulsar compact car after weak demand failed to generate even half the 64,000 annual sales predicted when it was launched in 2014. Nissan has already pulled its Note out of the declining small minivan segment. Even the new electric Leaf, a bright spot in terms of European sales, probably doesn’t turn a profit for the company.
Two other headaches for Nissan are the lack of consumer appetite for its Infiniti premium brand in most European markets where BMW, Mercedes-Benz and Audi dominate the luxury market. In Russia, Nissan’s low-cost Datsun brand has failed to win many buyers.
A new Juke would immediately improve Nissan’s outlook. So too would launching a range of hybrids to counter rival Toyota’s success at providing a diesel alternative. Nissan is looking to bring its ePower hybrid technology into Europe now that it has been introduced in Japan.
Nissan has had a good run in Europe since it transformed itself from also-ran to innovator in 2007 with the launch of the first-generation Qashqai, which spurred a consumer shift to high-riding SUVs and crossovers. Over a decade later, Nissan’s European success story needs a sequel.