As Nissan struggles to recover from a boardroom scandal surrounding Carlos Ghosn and a sales slump that threatens its alliance with Renault, China is emerging as its best bet for a turnaround.
Thanks to an early mover advantage and strategic partnership with Dongfeng Motor Group in 2003, Nissan is one of the strongest Japanese passenger automakers in China. It ranked fourth -- excluding multipurpose vehicles -- in June with a 6.7 percent share after Volkswagen Group's two joint ventures and General Motors's tie-up with SAIC Motor.
Former Chairman Ghosn, who was arrested in 2018 on financial misconduct charges and fled in a dramatic escape to Lebanon at the end of last year, called China a "new frontier" when he unveiled Nissan's push into Asia's largest economy almost two decades ago.
Now, the world's biggest automobile market is looking more like a key line of defense as China's economy returns to growth and demand for cars recovers. Nissan has staked its future on improving the quality of sales there, as well as in the U.S. and at home in Japan.
"Weaker brands will be weaker and the stronger ones get stronger, and that's an opportunity for us," said Shohei Yamazaki, president of Dongfeng Motor, the Wuhan-based firm that's in a 50:50 joint venture with Nissan. "But once we fail to keep or improve our brand, then it becomes a risk. It's easy to fall fast in China."
Even as Nissan's total retail volume fell about 11 percent in the 2019 fiscal year that ended in March, China has been something of a bright spot. Shipments there only slipped 1 percent and still comprised about one-third of Nissan's global volume of 4.93 million units. Even so, with an aging lineup and restructuring costs, Nissan posted a loss of $6.2 billion in the latest fiscal year.